Non-carbonated drinks add zing to Pepsi profit

From Tribune news services
Published July 14, 2006


PepsiCo Inc. on Thursday reported its biggest profit gain in almost two years and boosted its annual earnings forecast, citing sales of Gatorade and Lipton iced tea.

The Purchase, N.Y.-based soft-drink giant said net income climbed 14 percent, to $1.36 billion, or 80 cents a share, from $1.19 billion, or 70 cents a share, in the year-ago period. The latest result beat estimates by 3 cents a share. The jump in earnings was the biggest since the third quarter of 2004.

Sales rose 12 percent, to $8.6 billion, double the average over the past five years and faster than what growth has been at rival Coca-Cola Co.

Revenue at the North America division grew 13 percent, while volume increased 8 percent. The volume growth was driven by a 23 percent jump in non-carbonated beverages, including Gatorade, Aquafina, Lipton teas, Tropicana and Propel. Carbonated soft drink sales declined 1 percent.,

Revenue at the Frito-Lay snack division rose 8 percent, while volume was up 4 percent. Quaker Foods North America had revenue growth of 7 percent, while volume was up 3 percent.

"These results show why people want to own companies like Pepsi in times of economic uncertainty" said Don Gher, chief investment officer at Coldstream Capital Management Inc. in Bellevue, Wash.

Based on its strong growth in the first half of the year, PepsiCo revised its 2006 guidance and said it expects earnings of at least $2.95 a share, up from an estimate of $2.93 a share. Analysts are expecting $2.96 a share.

Shares of PepsiCo gained 97 cents, to $62.07, on the New York Stock Exchange.

[ 07-14-2006, 06:03 PM: Message edited by: Mr Zabe ]

You have to register to see the article.

CCE Girlie,
Thanks for the heads up. I fixed it as you can now see. [img]smile.gif[/img]
Zabe

Interesting MrZ., thanks for posting it!

No doubt that Gatorade acquisition gave PepsiCo an impulse in recent years...

and talking about PepsiCo.... Andres Manuel Lopez Obrador, PRD defeated candidate to the presidency of Mexico, in another act of insanity, accused Pepsi and Sabritas (the mexican Frito-Lay) to make "hidden" support to Felipe Calderon (winner of the presidential elections) in their ads during the electoral season... Lopez Obrador is such a jerk...

[ 07-14-2006, 09:31 PM: Message edited by: Ramón Cokeaholic ]

i read an article the other day about how coca-cola has not given up on carbonated beverages, and still intends to try and grow that segment.

i found this puzzling, since most analysts believe that the real growth is in non-carbonated bevs and waters.

do they know something we don't?

either way, i'm not saying that coke is abandoning its gains in non-carbs and waters. but, clearly, they're playing catch-up with pepsico.

i also agree that one of pepsi's best decisions was to buy gatorade (quaker oats). it will be a long time before "powerade" gets anywhere close to gatorade's 80% share.

Pepsi has achieved great growth specifically because they lost the Cola Wars. They really have capitalized on this current trend towords non-carbonated drinks. I also think that Frito Lay has been really on top of things lately. Still sodas are far from dead.