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PepsiCo Wolfs Down on Snacks

It beats first-quarter earnings estimates.
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first-quarter earnings rose 12% from a year ago, beating estimates on strong sales of potato chips and other salty treats to foreigners.

Pepsi earned $1.02 billion, or 60 cents a share, in the quarter, compared with $912 million, or 53 cents a share, a year ago. Analysts had been predicting earnings of 58 cents a share in the most recent quarter. Pepsi's sales rose 9% from a year ago to $7.21 billion, beating the Thomson First Call consensus of $7.03 billion.

By segment, volume rose 2% while revenue and operating profit rose 6% in Pepsi's Frito Lay North American unit. In Pepsi Bottling North America, volume rose 5%, revenue rose 12% and operating profit rose 3%, all compared with a year ago.

At Pepsi International, volume rose 7% -- including a 16% surge in snack sales -- while revenue jumped 12% and operating profit rose 21%, all compared with last year.

"We continue to see solid top-line momentum across our businesses, driven by product innovation and strong marketplace execution," the company said. "Importantly, we're also seeing good profit performance despite continued pressure from inflation in some of our key input costs. Overall, we're very pleased with the results in the quarter, and remain confident in the outlook for 2006."

Pepsi said it continues to expect earnings of at least $2.93 a share in 2006. Analysts surveyed by Thomson First Call are currently forecasting earnings of $2.94 a share in the period.

The stock closed at $57.50 Tuesday.