PepsiCo profit, revenue beat estimates as higher pricing pays off

(Reuters) – PepsiCo Inc reported better-than-expected quarterly profit and sales and raised its full-year adjusted earnings forecast as higher prices helped drive revenue growth in its beverages business for just the second time in almost four years. The company said it earned $1.98 billion, or $1.33 per share, for the three months ending June 13.

The Deerfield, Illinois-based company said it had profit of $1.18 per share.

Net revenue fell 5.7 percent to $15.92 billion as a stronger dollar continued to weigh on overseas sales.

Read the original article on Reuters. The unit’s net sales gained 1.9 percent in the quarter. In the same period of the previous year, the beverage and snack giant posted EPS of $1.32 and revenue of $16.89 billion.

Its gross margin widened to 55 percent from 54 percent.

“Through scientific R&D and strategic insights, we are developing sustainable innovation to offer consumers the range of food and beverage choices they’re looking for and creating a powerful platform for growth”, said CEO Indra Nooyi in a news release.

The company’s total revenue rose 5.1 percent, when stripping out the impact of foreign currency translations, acquisitions and divestures and structural changes. “Based on our year-to-date results and positive momentum in the businesses, we are increasing our full-year core constant currency EPS growth target to 8 percent”. The fact that beverages such as sodas and juices, might continue to decline again this quarter, could add more fuel to the argument made by investors to spin-off the ailing drinks business, and let the foods division function as a separate company. So far in 2015 Pepsi is on track to deliver roughly $1 billion in productivity savings and $8.5 billion to $9 billion cash returns to shareholders.

The company’s shares rose 3 percent to $98.49 in premarket trading on Thursday.