US food and beverage giant PepsiCo has posted a 12% rise in net revenues for the second quarter and a 15% increase in earnings per share from US$0.70 per share to $0.80.
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The company added that for the first six months, net revenues were up by 11% while EPS had risen by 14%.
“We’re pleased with our performance for the quarter and for the first half of the year,” said chairman and CEO Steve Reinemund. “Each of our operating divisions contributed to both top- and bottom-line growth and did a fine job of managing through a challenging input cost environment to deliver very solid results.
“Our international business had another outstanding quarter, with double-digit revenue and operating profit growth. And in North America, our balanced product portfolio has been a key to our results. Our beverage growth in North America was driven by our leading portfolio of non-carbonated beverages, and our snacks business had solid growth in both core salty snacks and in other macro snacks. Importantly, our health and wellness initiatives continue to yield positive results as our Smart Spot-eligible products grew at a double-digit rate.”
The company’s snack food subsidiary Frito-Lay North America (FLNA) recorded strong growth in both its salty and other macro snacks products, the company said. Salty snacks volumes were up by 3.5% in the quarter. The company said that the Lay’s and Cheetos brands experienced low-single-digit increases, while Tostitos volumes were up by high-single digits. However, Doritos volumes declined mid-single digits.
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By GlobalDataThe salty snacks volume performance was bolstered by double-digit growth from dips and variety packs, and over 20% growth in trademark Sun Chips. Other macro snacks volumes grew by 10%, the company said. Operating profit growth for the division benefited from the net revenue gains, but this was offset to a degree by higher energy and raw material costs.
Volume increases at Quaker Foods North America were driven by high-single-digit gains in the Quaker Oatmeal and Cap’n Crunch ready-to-eat cereal brands and double-digit increases in Life ready-to-eat cereal in the quarter, Pepsico said. Net revenue growth benefited from the volume gains and mix-related effective net pricing, but this was partially offset by the impact of more-favourable settlements of trade spending accruals in 2005.
Snack volume growth at PepsiCo International of 11% was led by high-single-digit growth at Sabritas in Mexico, and strong double-digit growth in Russia, Turkey, Egypt, Australia and India. PepsiCo Snacks volumes at Gamesa in Mexico increased by low-single digits and the UK grew in mid-single digits. Acquisitions added two points to volume growth, the company added.
PepsiCo said it expects 2006 full-year earnings per share of at least $2.95, with cash provided by operating activities in 2006 expected to exceed $6.2bn. The company said it also anticipates net capital spending of approximately $2.2bn, and share repurchases of approximately $3bn in 2006.
