US: PepsiCo profits slip despite Q1 beverage volume lift
- Group Q1 net profits down by 5% to US$1.08bn
- Group net sales up by 1% to $12.58bn
- Q1 operating profits fall by 4%, hitting $1.66bn
- PepsiCo Americas Beverages sales and volumes down but profits up
- Overall beverage volumes up by 3%
PepsiCo released its first-quarter results today
PepsiCo has posted a Q1 rise in beverage volumes but saw overall profits fall as sales stayed flat.
Group net profits slipped by 5% to US$1.08bn in the three months to the end of March, the soft drinks and snacks group said today (18 April). Net sales edged up by 1% to $12.58bn over the same period while operating profits dropped by 4% to $1.66bn.
PepsiCo blamed the disappointing sales performance on refranchising of its beverage business in China and unfavourable foreign exchange rates, particularly in Venezuela, where a currency devaluation cost the company $124m.
Beverage volumes for the company were more positive, up by 3%, and while its PepsiCo Americas Beverages unit saw sales slip by 1% to $4.4bn, about one-third of group total, operating profits jumped by 8%. Latin America beverage volumes increased by 1%.
In North America, non-carbonated beverage volumes fell by 1%, and CSD volumes declined mid-single digits, PepsiCo said.
Chairman and CEO Indra Nooyi said: “We’re greatly encouraged by the strong start to 2013. We delivered solid organic revenue growth and double-digit core EPS growth in the first quarter, driven by our balanced food and beverage product and global geographic portfolio.
"Our investments in creating this portfolio are paying off and our brand and innovation strategies are driving sustainable top-line growth.”
Looking ahead, the company said organic revenue is expected to grow mid-single digits.
In pre-market trading today, PepsiCo's share price edged up slightly.
To read the company's official statement, click here.
PepsiCo has launched a new television advert for its namesake soft drinks brand featuring footballer Lionel Messi....
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