US: Pepsi sees strong growth in Q2

The world's number two soft drink producer PepsiCo said today that it had delivered double-digit earnings per share growth of 12%, to $0.61 in the second quarter. Revenues grew 8% to US$7.1 billion, as the company benefited from volume growth, positive price/mix, and net favorable foreign exchange.

Year to date, earnings per share were up 13% to US$1.07, and revenues were up over 9%.

Chairman and chief executive officer Steve Reinemund said: "I am pleased with our performance this year. The PepsiCo portfolio continues to deliver very strong top and bottom line results."

Reinemund continued: "Consistent with our first half results, our outlook for 2004 remains very positive. We are targeting 2004 EPS to be at least US$2.29, and cash from operating activities to be about US$4.9 billion. After net capital expenditures, we expect operating cash flows to be approximately $3.4 billion. Furthermore, PepsiCo will continue to return cash to shareholders through both the recently increased dividend and continued execution of the share repurchase program."

Net income increased 12% for the quarter, and 13% year to date due to the total operating profit growth and a lower effective tax rate.

PepsiCo Beverages North America delivered strong top- line and bottom-line performance. Revenue growth of 9% reflected the volume growth plus continued positive mix shifts to non-carbonated beverages, higher- revenue packages and Diet Carbonated Soft Drinks (CSDs), the company said.

Non-carbonated beverage case sales climbed 14% in the quarter.

On a year-to-date basis, PBNA volume is up 6%, with CSDs up almost 3% and non-carbs up nearly 14%.

International Beverage volumes were up 13%. 

In Latin America, the launch of the redesigned PET bottle in Mexico and Venezuela led high-single-digit region growth. In the Europe, Middle East & Africa region, the double-digit volume growth was led by strong performance across the Middl East and in the UK. In addition, volume in Germany is rebounding from the impact of the bottle deposit legislation initiated in 2003, PepsiCo said.

China and India led the double digit growth in the Asia Pacific region.

PI revenue growth of 13% in the quarter was primarily volume-driven, with favourable foreign exchange contributing approximately three percentage points. Year to date, revenue grew 16%, with favourable foreign exchange contributing close to five percentage points of growth.

PI operating profits grew 23% in the second quarter.

Year to date, operating profits grew 27%, with favourable foreign exchange contributing approximately 4 percentage points of growth.