US: Dollar weighs on flat PepsiCo profits

Food and beverage giant PepsiCo today (20 April) reported flat underlying profits for the first quarter of 2009 as the strength of the US dollar weighed on the group's international results.

The company posted "core" operating profit - after stripping out costs linked to the group's ongoing restructuring programme - of US$1.55bn for the first three months of 2009.

Reported net revenue fell 1% to $8.26bn as the stronger dollar had an adverse effect on PepsiCo's businesses outside the US.

Nevertheless, PepsiCo reported a 3% rise in reported earnings per share and reaffirmed its full-year forecasts for sales and earnings. The firm maintained its guidance of "mid- to high-single-digit constant currency growth" in net revenue and core earnings per share.

Excluding the effect of the US dollar on PepsiCo's results, core operating profit and net revenue both rose by 6%.

The group's food business in Latin America saw operating profit jump 27%. PepsiCo's Frito-Lay North America unit posted operating profit growth of 12%, while its Quaker Foods North America business generated 7% higher profits during the first quarter of 2009.

PepsiCo International booked core operating profit growth of 11%.

Chairman and CEO Indra Nooyi said she was "pleased" with PepsiCo's first-quarter performance.

"Our portfolio breadth, geographic reach and operating agility enabled us to deliver strong performance in a challenging global macroeconomic environment," Nooyi said.

PepsiCo, meanwhile, has also made a move to buy the outstanding shares in its beverage bottlers The Pepsi Bottling Group (PBG) and PepsiAmericas.