PepsiCo’s profits have come in flat for the first half of its fiscal year, despite top-line gains across its worldwide snacks and beverage businesses.
The company announced earlier this morning (21 July) that net profit in the six months to 11 June came in at US$3.03bn. Operating profit leapt by 36% to reach $4.48bn, while sales rose by 19% to $28.76bn.
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For the second quarter, net profit increased by 18% to $1.88bn, while operating profits reached $2.75bn, a 12% increase on the year before. Sales in the three-month period rose by 14% to $16.83bn.
“Our global portfolio in both snacks and beverages is growing volume and net revenue, our global snacks portfolio, in particular, posted another strong quarter with balanced top- and bottom-line growth, and we continue to enjoy robust top-line growth in key emerging markets,” said PepsiCo chairman and CEO Indra Nooyi.
“While we are satisfied with the performance of our portfolio overall, the consumer in developed markets continues to be stressed, and the competitive environment in North America beverages has been particularly challenging.”
PepsiCo, meanwhile, altered its forecast for annual earnings. For 2011, the company is now targeting high single-digit earnings per share growth from last year’s core EPS of $4.13. The forecast includes a benefit of two percentage points from currency fluctuation.
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By GlobalDataThe estimate compares to PepsiCo’s previous guidance for 2011 of a 7-8% rise in core EPS on a constant-currency basis. That forecast included an estimated one to two percentage point benefit from foreign exchange.
“The company’s updated guidance reflects higher uncertainty regarding macroeconomic and consumer trends for 2011 and anticipates high global commodity cost inflation and ongoing support of strategic initiatives in emerging markets and of its brand-building activities,” PepsiCo said.
Click here to view the earnings release.
