PepsiCo has reported a 15% increase in second-quarter earnings per share to US$0.70, as non-carbonate drinks rescued a poorer performance by the CSD brands.

Net revenues increased 9%, led by double-digit growth at PepsiCo International and Quaker Foods North America and solid performance in North American beverage and snacks units.

Chairman and CEO Steve Reinemund said: "We are very pleased with our performance for the quarter and the first half of the year. Our portfolio of operating businesses delivered another quarter of very strong top line and bottom line results, giving us added confidence in our ability to meet the business and financial objectives we've laid out for 2005."

The company said that PepsiCo Beverages North America (PBNA) grew revenues 4%; volume declined slightly lapping over 7% growth from 2004.

Volumes declined slightly in the second quarter, lapping the strongest quarter from 2004 when volumes increased over 7%. Unfavorable Easter holiday timing had a 50-basis point impact on reported volume growth in the quarter. A carbonated soft drink (CSD) volume decline of 4% was substantially offset by a 5% increase in non-carbonated beverage volume.
Non-carbonated beverage volume growth was fuelled by double-digit growth in Aquafina and Propel fitness water and low-single-digit growth in Gatorade. Aquafina benefited from lower retail pricing and the introductions of the Aquafina Flavor Splash and Sparkling lines, PepsiCo said. Tropicana chilled juice volume declined mid single-digits as a result of higher pricing.
Net revenue grew 4% reflecting positive mix and pricing, offset partially by a decline in concentrate shipments. Operating profit grew 4%, in line with revenue growth as the impact of higher pricing was partially offset by higher supply chain costs.

Meanwhile, PepsiCo International (PI) profits increased 23% on 15% revenue gain. Beverage volume growth of 10% was led by double-digit gains in the Middle East, China, Argentina, and Venezuela. These gains were offset somewhat by pricing-related declines in India. Carbonated soft drinks grew at a high- single-digit rate, and non-carbonated beverage volume grew at a double-digit rate.

The company updated its full-year earnings outlook, stating it now expects earnings per share for 2005 of US$2.56 to US$2.59, excluding the impact of the 53rd week. Including the impact of the 53rd week, the company expects earnings per share of US$2.60 to US$2.63.

In its last earnings release in April, the company forecast 2005 earnings of at least $2.56 excluding the extra week, and earnings of at least $2.60 per share including the final week.