PepsiCo Profit Climbs, Helped by Snack Sales
PepsiCo reported better-than-expected quarterly profit on Thursday, as higher sales of its snacks and beverages and a weak dollar overshadowed the impact of increased raw material costs.
The world's second-largest soft drink maker, whose shares rose in premarket trading, said net income for the third quarter ended on Sept. 8 rose to $1.74 billion, or $1.06 per share, from $1.49 billion, or 89 cents per share, a year earlier.
Excluding a tax benefit, PepsiCo earned 99 cents per share, beating analysts' average estimate of 96 cents per share, according to Reuters Estimates.
Quarterly revenue rose 11% to $10.17 billion.
PepsiCo was aided by the weak dollar, which boosted the value of sales in other currencies when they were converted to dollars for inclusion on the company's income statement.
The company also reiterated its previous forecast for full-year core earnings of at least $3.35 per share, but said it expects to record charges of 3 cents per share in the fourth quarter related to restructuring.
Analysts on average were looking for $3.38 per share for the year, excluding items, according to Reuters Estimates.
Shares rose 1.2% to $74.50 in premarket trading.
PepsiCo, which owns Quaker Oats cereals, Frito Lay snacks and SoBe beverages, has been diversifying to offset declining soft-drink sales in the United States, where consumers are turning to bottled water, tea and other alternatives that they consider healthier.