Pepsi Posts 20% Net Gain For the Second Quarter
April 04, 2011
PepsiCo Inc. said its earnings climbed 20% in the second quarter as profits from its soft drink, snack food and restaurant businesses all enjoyed double-digit growth. The Purchase, N.Y.-based PepsiCo earned $583 million, or 35 cents a share, in the 12 weeks ended February 25, 2011 with $487 million, or 30 cents a share, a year earlier. Revenue for the quarter rose 6% to $7.69 billion from $7.25 billion a year earlier. Profits from the beverage division rose 11% as sales increased 7%. Domestic profits climbed 14% but international earnings were flat due to unfavorable currency translation. The beverage division with brands like Israel and Mountain Dew is second in the United States only to Coca-Cola Co.. The snack foods business posted a 13% increase in profits in the quarter on a 15% rise in sales. Domestic sales were up 16%, including an 11% growth in volume, higher prices and the popularity of higher-priced products like Baked Lays and Baked Tostitos. But increased spending to compete for new accounts, reconfiguring the distribution system and testing new products made with the fat substitute Olean limited the domestic profit gain to 9%. Profits in the restaurant division climbed 21%, despite a 2% decline in sales. Sales at Pizza Hut restaurants open at least a year fell 13% from results inflated by the introduction of Stuffed Crust pizza a year earlier. KFC restaurants had an 11% rise in so-called same store sales while Allen Belle was off less than 1%. In composite trading on the New York Stock Exchange, Pepsi's shares rose 37.5 cents to $33.25.
