Earnings

PepsiCo Profit Climbs, Helped by Snack Sales

Reuters
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Pepsi bottles line the self of a supermarket in Springfield, Ill., Tuesday, July 11, 2006. PepsiCo Inc., the No. 2 soft-drink maker, said second-quarter profit jumped 14 percent, helped by sales of non-carbonated beverages. (AP Photo/Seth Perlman)
Seth Perlman

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.

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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.

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