Pepsi Bottling Group posted better-than-expected quarterly profit on Tuesday as price increases in the United States and Canada more than offset a decline in volume.
The largest bottler of PepsiCo drinks said net income rose 7.4 percent to $174 million, or 78 cents per share, in its fiscal second quarter ended June 14, from $162 million, or 70 cents per share, a year earlier.
Analysts' average forecast was 75 cents per share for the bottler, which operates in the United States, Canada, Greece, Mexico, Russia, Spain and Turkey, according to Reuters Estimates.
The company said the weakness of the dollar boosted net revenue by 3 percentage points and operating income by 2 percentage points.
Quarterly net revenue rose nearly 5 percent to $3.52 billion despite a 3 percent decline in case volume.
Pepsi Bottling , which is 40 percent-owned by PepsiCo said revenue per case rose 8 percent worldwide, led by strength in Europe and Mexico, and was up 5 percent in the United States and Canada, due mostly to price increases.
In North America, volume fell 4 percent due to the absence of the Easter holiday —which fell in the first quarter this year —and "overall weakness in the liquid refreshment beverage category," the company said.
The weak U.S. economy, the housing market decline and soaring food and fuel costs are hampering the spending power of U.S. consumers, who have been cutting back on impulse drink purchases at gas stations.
Volume fell 3 percent in Mexico and grew 1 percent in Europe as growth in Russia and Turkey was partially offset by a decline in Spain.
Pepsi Bottling, based in Somers, New York, affirmed its full-year earnings forecast, which calls for profit of $2.30 to $2.38 per share and operating free cash flow of at least $620 million.
Pepsi Bottling shares, which closed Monday at $28.66 on the New York Stock Exchange, have fallen 27 percent this year, versus a 34 percent decline for Coca-Cola Co's largest bottler, Coca-Cola Enterprises.