PepsiCo Earnings Rise, Top Views

The company sees earnings growth of 13% to 14% for the balance of the year.

Author:: Rebecca Byrne
Publish date:: Apr 23, 2002 9:53 AM EDT

PepsiCo

said first-quarter profits rose 14% from last year on stronger sales at its largest divisions, Frito-Lay and Pepsi-Cola in North America.

The Purchase, N.Y.-based company reported net earnings of $681 million, or 38 cents per share, from $597 million, or 33 cents a share, last year. Thomson Financial/First Call had called for a 37-cent profit.

"All our businesses contributed to our quality growth, led by strong top and bottom line results at our largest divisions, Frito-Lay North America and Pepsi-Cola North America, along with a very strong quarter from Gatorade," said Chairman and CEO Steve Reinemund. "Our international results were also healthy, despite the impact of adverse global macroeconomic conditions."

Sales increased 8.5% to $5.10 billion from $4.70 billion a year ago. PepsiCo's comparable results assume that the adoption of an accounting change and the consolidation of its European joint venture took place in 2001. They also exclude costs associated with the Quaker merger and other restructuring charges.

Revenue at Frito-Lay and Pepsi-Cola North America rose 7% from last year. Pepsi-Cola's volume increased almost 5% due to new products like Mountain Dew Code Red and Pepsi Twist and new package sizes of Aquafina bottled water. Gatorade volume rose 20%.

The company said it expects earnings per share to grow 13% to 14% for the year and said it is on track to realize synergies of $175 million for 2002 from the Quaker acquisition.