NEW YORK – PepsiCo Inc. (PEP), the world's No. 2 soft drink company, said Thursday quarterly profit rose 13 percent on strength in its international business and price hikes on beverages in North America.
The company, whose brands include Mountain Dew, Gatorade, Doritos and Cheetos, also raised its profit forecast for the full year due to a change in the amount of taxes it expects to pay. Its stock rose 1.4 percent following the release of the results and forecast.
PepsiCo's broad portfolio of products has allowed the company to grow profits despite health and obesity issues that have hurt competitors in the soft drink and snack industry.
"Pepsi continues to deliver top-tier results amid earnings weakness from many of its peers, and results should get better through the year as comparisons (to last year's profit performance) ease," JPMorgan analyst John Faucher said in a research note. Faucher has a rating of "overweight" on PepsiCo's stock.
PepsiCo said its first-quarter operating profit was squeezed by rising fuel and energy costs.
Frito-Lay North America (search), the company's largest division, booked $2.26 billion in revenue during the quarter.
The company reported quarterly profit of $912 million, or 53 cents a share, up from $804 million, or 46 cents a share, a year earlier.
Analysts' average forecast was 50 cents a share, according to Reuters Estimates.
Total revenue rose to $6.59 billion from $6.13 billion, the Purchase, New York-based company said. Total volume of products sold rose 4 percent.
PepsiCo raised its earnings-per-share forecast for the full year by 1 cent due to an adjustment in its expected tax rate. PepsiCo said it expects earnings per share of at least $2.56.
The forecast excludes the impact of a 53rd week in the company's fiscal year. It said the extra week is expected to add 4 cents to 5 cents to earnings per share. Fiscal 2004 covered 52 weeks.
The company's international division reported a 20 percent rise in operating profit in the first quarter, boosted by snack volume growth in emerging markets such as India, China, Russia and Brazil. Foreign exchange rates also contributed to the growth.
Its Pepsi Beverages North America unit, which has been hurt by health trends, reported 8 percent operating profit growth. Double-digit volume growth in non-carbonated beverages such as Gatorade and Aquafina bottled water offset a 1 percent volume drop in carbonated soft drinks.
The company's beverage business also benefited from Easter falling in the first quarter this year.
Shares of PepsiCo rose 75 cents to $54.38 on the New York Stock Exchange (search).