NEW YORK – Pepsi Bottling Group Inc. (PBG) Thursday reported better-than-expected quarterly profit on strong sales of diet soft drinks and noncarbonated beverages (search) such as water and Tropicana juice drinks.
The largest bottler of Pepsi drinks, whose shares rose almost 2 percent, reported earnings of $142 million, or 53 cents a share, for its fiscal second quarter ended June 12, compared with $131 million, or 47 cents a share, a year ago.
Revenue rose to $2.67 billion from $2.53 billion, the company said in a statement.
Analysts, on average, expected earnings per share of 51 cents, in a range of 49 cents to 54 cents, according to Reuters Estimates.
Pepsi Bottling said net revenue per case rose 4 percent on strong sales of its most expensive products, such as refrigerated drinks.
"The pricing environment in the U.S. was favorable — a trend we expect will continue," Chairman and Chief Executive John Cahill said in a statement.
Buoyed by the results, the company increased its forecast for 2004 earnings per share to $1.68 to $1.74. Its previous forecast had been $1.62 to $1.70.
The company's worldwide sales by volume rose 2 percent during the quarter, led by a 10 percent rise in Europe. But the Mexican business continued to lag due to poor water sales, and sales by volume there fell 7 percent.
The volume growth and the net revenue per case figure, which shows that consumers are willing to pay higher prices for soft drinks, were key drivers of the profit increase, Smith Barney analyst Bonnie Herzog said in a research note.
Shares of Pepsi Bottling rose 55 cents, or 1.8 percent, to $30.79 Thursday on the New York Stock Exchange (search), surpassing the 12-month high of $30.69 it hit after reporting a 28 percent gain in first-quarter earnings.