The world’s number two soft drink producer PepsiCo reported solid second quarter results today with reported earnings per share up 19% to $0.58, on a fully diluted basis. Year to date, earnings per share were up 18%, to a total of $1.02, on a fully diluted basis.
The company’s results were driven by a good performance in snack foods. However, CEO Steve Reidmund also said that in beverages the company had “delivered significant sequential volume and revenue improvement compared with the first quarter.”
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A reduction in costs relating to the Quaker merger also contributed five percentage points of growth to the earnings per share increase, both for the quarter and year to date.
Reinemund said: “We continue to be proud of our performance in this difficult global macro-economic environment. Our terrific portfolio of businesses gives us the flexibility to deliver solid financial results while investing for the future. We’re focused on driving top line growth through innovation and by leveraging our strong brands and go-to-market systems. Domestically, we had excellent volume and revenue growth at our Frito-Lay snack business, while PepsiCo Beverages delivered significant sequential volume and revenue improvement compared with the first quarter. Internationally, we also had excellent top line growth, with strong volume and revenue growth in both snacks and beverages.”
Reinemund continued: “These strong top line results combined to allow us to cover inflation, make selective investments in our business and still deliver another quarter of solid double-digit earnings per share growth. And we’re on track to deliver reported EPS of $2.16 to $2.19 for the full year 2003, which includes about 3 cents of merger costs.”
Total servings of products sold worldwide were up 5% in the second quarter of 2003 and 4% year to date. Servings of snacks worldwide grew 4% for the quarter and year to date, while worldwide servings of beverages grew more than 5% for the quarter and 4% year to date.
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Total operating profit, which includes corporate unallocated expenses and merger costs, increased 13% both for the quarter and year to date. Total net income increased 15% for the quarter and 14% year to date.
