US: Gatorade, Aquafina drive PepsiCo profits
Surging sales of non-carbonated soft drinks in North America buoyed first-half earnings at PepsiCo, the US drinks giant has announced.
PepsiCo posted a 14% rise in net income to US$2.4bn for the first six months of the year with net revenues up 11% to US$15.8m. The results, announced yesterday (13 July), beat analyst forecasts and drove PepsiCo's share price to an all-time high of US$62.33.
The company raised its full-year earnings outlook to $2.95 a share based on the strong first-half performance. "This full year outlook takes into account the positive momentum of the business, but also factors in our expectation for a continued challenging input cost environment," PepsiCo CFO Indra Nooyi.
PepsiCo's stable of non-CSD brands, including Gatorade sports drinks and Aquafina water, saw volumes in North America leap 23% during the second quarter. The increase helped PepsiCo absorb a 1% fall in CSD sales. Sales of the hallmark Pepsi brand in North America fell in the "low single-digits", the company said.
CSDs, however, continued to perform strongly in PepsiCo's international markets with volumes up 9%, driving total drinks volumes up 10%. PepsiCo noted that the performance was "led by double-digit increases in the Middle East, China, Argentina, Thailand and Russia and mid-single-digit growth in Mexico".
Chairman and CEO Steve Reinemund said: "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."
Reinemund added: "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."
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