New York: PepsiCo Inc reported quarterly profit slightly ahead of Wall Street’s expectations, helped by higher sales in both its snacks and drinks units, and stood by its full-year outlook.
PepsiCo said its 2011 forecast anticipated “high global commodity cost inflation, difficult macroeconomic conditions in developed markets and ongoing strategic investments in emerging markets and in brand-building activities.”
Beyond 2011, PepsiCo forecast high-single-digit earnings-per-share growth, due in part to an expectation of continued commodity cost inflation and macroeconomic uncertainty.
The maker of Tropicana orange juice and Frito-Lay snacks said net income was $1.14 billion, or 71 cents per share, in the first quarter, down from $1.43 billion, or 89 cents per share, a year earlier.
Excluding items, PepsiCo earned 74 cents per share, topping analysts’ average estimate, according to Thomson Reuters I/B/E/S, by a penny.
Revenue jumped 27% to $11.94 billion. Analysts expected $11.71 billion. Excluding the impact of acquisitions, revenue was up 5%.
Worldwide, volume rose 3% in the snacks business and 3.5% in the beverage business, excluding the impact of acquisitions. North American beverage volume rose 2%, excluding acquisitions.
PepsiCo shares, which closed at $67.93 on Wednesday on the New York Stock Exchange, were unchanged on Thursday in premarket trading.
The company stood by its prior target for 2011 earnings to grow 7% to 8% from $4.13 per share in 2010.
Chief financial officer Hugh Johnston said on the CNBC cable news channel that PepsiCo would raise prices again later in the year and that higher gasoline prices have not changed its consumers’ buying habits.
Pepsi and its arch-rival Coca-Cola Co have both said they would raise prices on some drinks this year to offset soaring costs for everything from corn syrup to packaging. But PepsiCo’s food business makes it exposed to a much wider range of commodities than Coke, which weighs on its valuation and ability to fully offset the inflation.
Earlier this week, Coke said its profit was hurt by the disaster in Japan and marketing expenses, but that it expected price increases to help it offset rising costs.