Soft drink and snack-food maker PepsiCo yesterday reported a 13 percent rise in second-quarter earnings, driven by strength in China and...
NEW YORK — Soft drink and snack-food maker PepsiCo yesterday reported a 13 percent rise in second-quarter earnings, driven by strength in China and other developing markets, as well as strong domestic sales of cereal and pasta in its Quaker Foods business.
The company, which also owns Frito-Lay snacks, said it would bolster investment in its North American beverage business and overseas to revive sluggish soda sales. The increased spending on new products comes as PepsiCo and archrival Coca-Cola each grapple with declining soda sales, as global consumers are increasingly drawn to coffee, tea and juice items.
“We do intend to step up investments in North American beverages and in our international business,” Chief Financial Officer Indra Nooyi said in a conference call. Among other things, the company also said it would “invest aggressively” in new drinks like Pepsi One, a new diet soda, and Pepsi Lime.
PepsiCo, the world’s No. 2 soft drink maker, reported second-quarter profit of $1.19 billion, or 70 cents per share, for the 12 weeks ended June 11, up from $1.06 billion, or 61 cents, in the year-ago period. The company also forecast full-year earnings in line with previous guidance.
Most Read Stories
- Seattle hits record high for income inequality, now rivals San Francisco
- Anthony Bourdain brought 'Parts Unknown' to Seattle — here's where he ate
- A Washington county that went for Trump is shaken as immigrant neighbors start disappearing VIEW
- Seattle’s crazy restaurant boom | PNW Magazine VIEW
- Seattle-Dublin nonstop flights to begin in May 2018
The results beat Wall Street’s consensus forecast of 67 cents per share, and PepsiCo’s shares rose 75 cents, or 1.4 percent, to close at $54.60 on the New York Stock Exchange, where the stock was among the most actively traded issues.
“Their international business continues to be strong. That’s where you’re seeing a lot of growth and margin expansion,” said Bonnie Herzog, managing director and food analyst at Smith Barney.
Revenue rose 9 percent to $7.7 billion, topping analysts’ average forecast of $7.56 billion. Volume rose in the international division, snacks volume rose 3 percent, while drinks volume jumped 10 percent. PepsiCo said it saw strong snacks growth in developing markets like India, China, Russia and Turkey, while drinks volume growth was led by the Middle East, China and Argentina.
20% from a year ago
Online brokerage Ameritrade Holding, which recently agreed to buy rival TD Waterhouse USA, said its third-quarter earnings rose 20 percent from a year ago, meeting Wall Street expectations, and is on track to deliver record earnings for the fiscal year.
Net income rose to $74.7 million, or 18 cents per share, in the three months ended June 24 from $62.3 million, or 15 cents per share, a year ago. Revenue grew to $234.4 million from $220 million a year ago.
Analysts surveyed by Thomson Financial had expected a profit of 18 cents per share on revenue of $227.1 million for the Omaha, Neb-based company.
Ameritrade’s shares rose 37 cents to close at $19.28 yesterday on the Nasdaq Stock Market, surpassing its 52-week high of $19.
Levi Strauss & Co.
yields positive result
Levi Strauss & Co.’s second-quarter profit more than quadrupled, reflecting a more disciplined financial approach that could set the stage for an initial public offering by the fabled maker of jeans.
The San Francisco-based company said it earned $26.8 million for the three months ended May 29, up from net income of $5.6 million from the same time last year.
The increase included a boost from a favorable Mexican court ruling that overturned a $45 million judgment against Levi’s.
Second-quarter revenue totaled $943.7 million, a 1.6 percent decrease from $958.8 million last year.
If not for fluctuations in the dollar that worked in Levi’s favor, the company said its second-quarter sales would have dropped by 4.4 percent.
Levi’s is privately held but discloses its financial results because some of its debt is publicly traded. The company said it has focused on improving profit during the first six months of its fiscal year and plans to increase marketing and promotional activities in the second half.
Compiled from The Associated Press