PepsiCo has said one of its key investments in 2013 will be to accelerate investment in R&D and innovation.

The US food and drink giant this morning (18 April) reaffirmed its full-year earnings forecast despite booking a drop in first-quarter profits due in part to the devaluation of the Venezuelan bolivar. The Walkers crisps producer saw earnings fall 4.6% to US$1.08bn and operating profit decline 4% to $1.66bn. Core constant-currency operating profit, which excludes items like foreign exchange and restructing charges, was up 9%.

Sales edged up 1% to $12.58bn. On an organic basis, which excludes M&A and foreign exchange, sales increased 4%.

Sales from its PepsiCo Americas Foods arm grew 6%. Core constant-currency operating profit grew 7%.

Within this division of the company, revenue from the Frito-Lay North America snack unit increased 4%. The company’s Latin American Foods business posted a 14% increase in organic sales. Core constant-currency operating profit from both units was up.

Sales from PepsiCo’s Quaker Foods North America division increased 2% but core constant-currency operating profit fell 6% amid investment in advertising and innovation.

Speaking on the firm’s earnings call today, CFO Hugh Johnston told analysts PepsiCo will look to match last year’s spending on marketing as a proportion of sales across the company. However, he said it would speed up its investment in research and development.

“We will grow A&M investment at least in line with net sales meaning you should expect A&M spending of at least 5.7% of sales, which was our 2012 baseline investment. In addition, we are also accelerating our investment in R&D and innovation,” Johnston said.

“With the productivity we are unlocking, we are able to invest in growth drivers like advertising and new product launches and to simultaneously drive margin improvement.”

PepsiCo stood by its 2013 earnings growth forecast of 7% from the $4.10 per share it earned in 2012.

Johnston said: “We are pleased with how first quarter came in and that increases our confidence in delivering our full-year guidance.”

However, he told analysts not to increase their 2013 estimates. “The world remains a volatile place and we may also choose to incrementally invest in the long-term value building initiatives such as advertising, innovation and in emerging markets growth capacity.”

The CFO said he expects commodity inflation will “ramp up sequentially” from the first quarter but reiterated that its full-year outlook remains unchanged from its original guidance.

“Our outlook for 2013 is consistent with our long-term targets for net revenue, operating profit and core constant currency EPS. We expect to drive improved margins and generating and returning cashflow to our shareholders remains a top priority for the company.”

Janney Montgomery Scott analyst Jonathan Feeney said: “Despite various headwinds – for example, weak consumer, cost inflation, gas inflation – PepsiCo appears to be sticking to its planned increases in reinvestment levels behind its 12 global mega brands, which should keep its healthy, highly cash-generative developed markets business powering its robust growth overseas.”

Wells Fargo analyst Bonnie Herzog said PepsiCo delivered “decent” first-quarter results, adding: “Given the recent strength in the stock, we expect limited upside today based on these results.” 

PepsiCo’s share price was up 3.84% to $81.88 at 12:16 ET.