US: PepsiCo delivers strong quarter
By just-drinks.com editorial team | 7 October 2003
Net income rose to US$1.08 billion, compared to US$953m a year earlier. The company's profit was in line with Wall Street's estimate.
Chairman and chief executive officer Steve Reinemund called it a "terrific quarter". He said: "We had strong, balanced performance across the portfolio -- on both the top and bottom lines.
"Our two largest domestic divisions, Frito-Lay North America and PepsiCo Beverages North America, both had strong quarters. Both had good volume growth due to strong incremental innovation combined with excellent execution in the core brands. Revenues grew well ahead of volume due to positive price/product mix, combined with more efficient promotional spending."
Volume continued to be solid, with total servings of products sold worldwide up 5% in the third quarter of 2003 and almost 5% year to date. Servings of snacks worldwide grew 6% for the quarter and 5% year to date, while worldwide servings of beverages grew 5% for the quarter and 5% year to date.
Division net revenues for the third quarter rose 9% to $6.8 billion, while division operating profit rose 9% to $1.5 billion. The company said the gains reflected the volume increases, as well as positive product mix and effective net pricing. Currency exchange rates did not have a significant impact on net revenue or profit growth for the quarter, PepsiCo said.
As a result of the good quarter PepsiCo said it would deliver at the higher end of its full year forecasts.
"Based on the strength of this quarter and the current outlook for the fourth quarter, PepsiCo should deliver on the higher end of our current guidance. Full year 2003 guidance is now reported EPS of $2.19, including 2 cents of merger costs," said Reinemund.
Sectors: Soft drinks