US: Pepsi Bottling volumes drive income boost
The Pepsi Bottling Group today reported second quarter net income of US$148m, or diluted earnings per share (EPS) of $0.59. The results were up on the same period last year as the company grew volumes by 3%. In the second quarter 2004 the company reported net income of US$142m.
PBG said it grew its worldwide physical case volume by 3% on a constant territory basis. The soft drink bottler's US and Canada operations each delivered a 1% volume improvement. The European business generated 9% volume growth, while Mexico reported physical case volumes up 8%.
Reported net revenue per case was up 3% for the quarter, both worldwide and in the US.
Reported operating income increased 6%, with strong performances from PBG's businesses in the U.S., Canada and Mexico. Foreign currency translation accounted for one point of that growth.
The company said it was raising its full year pro forma operating income growth expectations to a range of 3-5%. Correspondingly, PBG expects pro forma diluted EPS for the year to be US$1.82 to US$1.88, excluding the impact of the 53rd week.
"During the second quarter, we continued to deliver on our objective of solid topline growth across our businesses," said John T. Cahill, PBG chairman and CEO. "We are pleased with our performance in the U.S. While our overall carbonated soft drink business was soft, new products boosted our volume performance. The launch of Pepsi Lime and Tropicana Twister as well as the continued rollout of Aquafina FlavorSplash, Aquafina Sparkling and Lipton Iced Tea lifted our volume for the quarter. We also delivered net revenue per case improvement in the US and worldwide."
Cahill continued, "Mexico delivered strong results in the second quarter with profits nearly doubling year-over-year. Despite continuing challenges in the Mexico City area, our overall business performed well and we're realizing the benefits from the productivity initiatives we executed over the past two years, which fueled our profit growth. We have a robust calendar of activities in place to drive consumer excitement for the balance of the year, including new in-and-out product and package innovation."
"In Europe, we posted another consecutive quarter of strong volume growth. Double-digit growth in Russia was led by strong sales of Pepsi, AquaMinerale, Tropicana and Lipton Iced Tea. Strong topline growth in Turkey continued with a double-digit volume increase in Pepsi and excellent growth in Lipton Iced Tea and Aquafina. In Spain, volume improved as the quarter came to a close, finishing up two percent. Our innovation calendar in Europe is quite strong for the balance of year with new products and packages planned for each of our territories."
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