PepsiCo Inc reported better-than-expected quarterly profit and sales and recorded revenue growth in its Americas beverages business for just the second time in nearly four years, helped by higher demand and an increase in prices. The company also raised its full-year adjusted earnings forecast.
PepsiCo, like other soft drink makers, has been battling falling soda sales in the United States, with customers turning to healthier drinks that use natural ingredients. However, revenue from the company's Americas beverages business, its largest, rose 1 percent to $5.34 billion in the second quarter, helped by a 1 percent rise in organic volume sales and its strategy of raising product prices overseas to offset the impact of a strong dollar.
The company said on Wednesday that it would report results for its North America beverages business separately from the third quarter, instead of clubbing it with Latin America beverage sales. PepsiCo took a net charge of $105 million in 2014 as it reassessed the value of its assets in Venezuela after the devaluation of the bolivar, and said exchange mechanisms in the country are still shrouded in significant uncertainty. Frito-Lay snacks sales in North America, PepsiCo's second-largest business, grew 2 percent to $3.45 billion in the quarter. The business sells snacks such as Doritos tortilla chips and Cheetos.
The company raised its forecast for 2015 adjusted earnings per share growth to 8 percent on a constant currency basis, or about $5 per share, from 7 percent. Net income attributable to PepsiCo rose to $1.98 billion, or $1.33 per share, in the quarter ended June 13. Excluding items, it earned $1.32 per share, beating the average analyst estimate. Net revenue fell 5.7 percent to $15.92 billion as a stronger dollar continued to weigh on overseas sales, but also trumped estimates.
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