GLOBAL soft drink conglomerate PepsiCo said yesterday that it earned $427 million in its first quarter, up 8 per cent from a year earlier, boosted by higher North American sales of its Pepsi and Mountain Dew brands.
The profit meant income of 27 cents a share and came on sales of $6.7 billion. The period ended March 22. A year earlier, Pepsico earned $394 million, or 24 cents a share, on sales of $6.55 billion.
Pepsi's earnings exceeded First Call's consensus estimate of 23 cents a share.
Case sales grew 6 per cent, driven by double-digit volume growth for Mountain Dew and solid growth in Pepsi, the company said.
The growth was largely driven by favourable prices in grocery stores as lower packaging costs were passed through to the consumer, it said.
International sales were down 14 per cent. Volume fell 3 per cent, but Pepsi noted that the rate of decline had slowed from the 9 percent decline in the fourth quarter of 1996, reflecting in part its relaunch in Venezuela.
In its snacks division, Frito Lay sales increased by 7 per cent and its profit by 15 per cent. Internationally, Frito Lay's sales grew by 3 per cent and its profit by 36 per cent.
Worldwide restaurant profits advanced 7 per cent as a result of strong results in the international business and a modest increase in the United States, PepsiCo said.
Mr Roger Enrico, PepsiCo's chairman, said the company was on track with its strategy of divesting its restaurants to focus on beverages and snack foods.
"We re-franchised 94 stores this quarter and for the full year expect to sell as many or more than we did last year," Mr Enrico said in a statement.
Pizza Hut, the largest brand, had a same-store sales decline of 8 per cent.
KFC and Taco Bell posted same-store sales growth of 4 per-cent in the quarter. In Taco Bell's case, the key driver was the success of the Star Wars promotion, PepsiCo said.
PepsiCo's stock jumped by $2.75 to $34 in morning trading on the New York Stock Exchange, where it was one of the most active issues.
