PepsiCo sees less forex boost but keeps outlook
PepsiCo Inc posted a slightly better-than-expected quarterly profit and affirmed its full-year goal despite a smaller boost from foreign exchange.
The maker of Pepsi-Cola, Lays potato chips and Quaker oatmeal cited cost-savings from last year's acquisition of its North American bottlers and the purchase of a Russian beverage company, which will help it endure higher commodity costs and weak consumer spending.
PepsiCo's shares rose 0.8 percent, or 50 cents, in premarket trading on Wednesday.
Net income was USD 2.0 billion, or USD 1.25 per share in PepsiCo's third quarter, up from USD 1.92 billion, or USD 1.19 per share, a year earlier.
Excluding items, earnings were USD 1.31 per share, topping analysts' average estimate by a penny, according to Thomson Reuters.
Revenue climbed to USD 17.58 billion from USD 15.51 billion a year ago. Analysts on average were expecting USD 17.18 billion.
The company stood by its full-year outlook, which calls for 2011 earnings to grow at a high single-digit rate. But that forecast now only includes a 1 percentage-point boost from foreign exchange rates, whereas PepsiCo earlier expected a 2- point boost.
The outlook "reflects uncertainty regarding macroeconomic and consumer trends for 2011 and anticipates high global commodity cost inflation and ongoing support of strategic initiatives in emerging markets and brand building activities," the company said.
Still, PepsiCo said it expects earnings to benefit from cost-savings related to last year's acquisition of its North American bottlers and the purchase of a Russian drink company.
PepsiCo also said it expects about USD 2.5 billion in share buybacks this year.
The company's shares rose 50 cents to USD 61.45 in premarket trading from Tuesday's close of USD 60.95 on the New York Stock Exchange.