Pepsi nudges upwards against expectations


Global beverage and snacks giant PepsiCo reported a slight increase in second-quarter revenue and profit, as its vital North American beverages division made gains, amid lower promotional spending and productivity gains.

PepsiCo's revenue increased 2% to $15m7 billion in the quarter ended 17 June. Its net income of $2,1 billion was R100 million more than expected. The firm has beat analyst expectations for a 20th straight quarter.

"Our results for the second quarter were very much in line with our expectations and we remain on track to meet our 2017 financial goals," PepsiCo CEO Indra Nooyi said in a statement.

"The power and durability of our brand and product portfolios, strong marketplace execution, and the balance of our geographic footprint enabled us to deliver strong operating results in the midst of pockets of macroeconomic challenges and increasingly dynamic retail and consumer landscapes."

PepsiCo is a global food and beverage company with net revenues of more than $63 billion in 2015 and a product portfolio that includes 22 brands that generate more than $1 billion each in estimated annual retail sales.The company said in its quarterly filing that its Frito-Lay and beverages businesses in North America managed to boost revenue year over year despite declines in volume because of "effective net pricing."

The company said operations in its Europe Sub-Saharan Africa division had been positively impacted by productivity, with the sale of its minority stake in British bottler Britvic and the impact of higher prior-year restructuring and impairment charges contributed 28 percentage points and three percentage points to operating profit growth, respectively. These impacts were partially offset by operating cost inflation, higher advertising and marketing expenses and higher raw material costs.

Although it has fallen behind Coca-Cola and Dr Pepper Snapple in recent times, PepsiCo has always had a shrewd eye for an acquisition and has added prudently to its stable of brands. Beyond their namesake brand, they've created partnerships and/or acquired a plethora of household names like Cheetos, Lay's, Tropicana, Starbucks, Quaker Oats, and the list goes on. These brands have gone some way towards supporting falling soda sales and the company is also looking to increase its offering to a growing health-conscious market.

Taking the reins as finance boss in 2010 after 23 years with the company, Hugh Johnston (pictured) is vice-chairman and CFO of PepsiCo.

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