PepsiCo net income falls 21% to $1.48 bn in Apr-Jun quarter
New York: Global soft drinks and snacks major PepsiCo on Wednesday reported a 21 percent drop in net income to USD 1.48 billion (Rs 8,300 crore) in the April-June quarter of 2012 hit by one-time restructuring costs and strength in dollar.
The company had a net income of USD 1.88 billion in the year-ago period, PepsiCo said in a statement.
The company, which owns brands such as Tropicana juices and Quaker oatmeal, said its net revenues declined by two percent to USD 16.45 billion in the three months to June 2012 from the year-ago period primarily due to beverage refranchisings in China and Mexico.
"Reflecting the impact of previously announced structural changes and negative foreign exchange translation, reported net revenue declined 2 percent," PepsiCo said.
PepsiCo said organic revenue, which excludes currency fluctuations, acquisitions and divestitures, rose five percent.
However, the company said second quarterly results were in line with management's expectations.
"We were able to achieve significant pricing in the second quarter, reflecting the strength of our brand portfolio and the success of our packaging initiatives.
"Our disciplined approach to pricing and continued focus on brand investment drove 5 percent organic net revenue growth and allowed us to substantially offset approximately USD 350 million in commodity cost inflation," said PepsiCo Chairman and CEO Indra Nooyi.
PepsiCo said it incurred pre-tax non-core restructuring charges of USD 77 million in the second quarter of 2012 and anticipates additional charges of about USD 315 million in the balance of 2012 and USD 102 million in the next three years.
"Charges under this programme resulted in cash expenditures of USD 96 million in the second quarter of 2012, and the company anticipates additional cash expenditures of approximately USD 295 million in the remainder of 2012, with the 7 balance of approximately USD 290 million of related cash expenditures expected in 2013 through 2015," PepsiCo said.
PepsiCo said organic revenues grew 10 percent in Asia, Middle East and Africa region. Although, the company posted an eight percent decline in net revenues to USD 1.76 billion from these regions in the April-June quarter of 2012.
Besides, operating profit also plunged 45 percent to USD 165 million in the quarter under review in Asia, Middle East and Africa regions.
"PepsiCo is diligently executing the strategy we set forth at the start of the year, and we remain on track to achieve our full-year targets," Nooyi said.