NEW YORK – PepsiCo Inc. (PEP) posted a greater-than-expected quarterly profit Tuesday on a lower tax rate, higher sales of Frito-Lay snacks and strength in international markets such as China and the Middle East.
The world's No. 2 soft-drink company reported earnings of $1.56 billion, or 94 cents per share, for the second quarter, ended June 16, up 13 percent from $1.38 billion, or 81 cents per share, a year earlier.
Analysts on average were expecting 89 cents per share, according to Reuters Estimates.
Quarterly revenue rose 10 percent to $9.61 billion, fueled by an 18 percent increase in international sales.
Worldwide sales by volume increased 4 percent.
The company said it had also benefited from a reduction of 2.2 percentage points in the quarterly tax rate.
Pepsi, based in Purchase, New York, raised its full-year earnings forecast to at least $3.35 per share from its prior outlook of at least $3.30.
Pepsi, which also owns Gatorade sports drinks, Quaker Oats cereals and Rice-A-Roni side dishes, has used its diverse portfolio to offset declining soft-drink sales in the United States, where consumers are instead choosing options they perceive as being healthier, such as bottled water and tea.
By contrast, Coca-Cola Co., the world's largest beverage company, has relied on its deep presence around the world, especially in emerging markets where people still eagerly drink soft drinks.
Yet the rivals' strategies are becoming more similar as Pepsi has been focusing on overseas growth and Coke has acquired noncarbonated beverage makers Glaceau and Fuze.
In North America, sales volume of carbonated soft drinks fell 4 percent. Noncarbonated beverage volume rose 3 percent, as strong sales of Lipton teas and Aquafina water offset declines in Tropicana orange juice and Gatorade.
At Frito-Lay, revenue rose 6 percent, helped by increased volume, prices, and sales of pricier items such as multipacks, dips and Quaker rice snacks.
Pepsi's international division saw volume growth of 9 percent for snacks and 8 percent for beverages as strength in Pakistan, Russia, the Middle East, Britain and China overshadowed declines in Mexico and Thailand. Carbonated soft-drink volume grew at a high single-digit rate, while noncarbonated beverage volume rose at a double-digit rate.
As of Monday Pepsi shares traded at 19.9 times full-year earnings estimates, a slight discount to Coke stock, which had a trading multiple of 20.4, according to Reuters data.