New York – Snack and beverage giant PepsiCo Inc. reported a 13 percent jump in fourth-quarter profit Wednesday, as strong sales of snacks like Doritos and Ruffles and noncarbonated drinks such as Gatorade offset high fuel costs and continued sluggishness in the North American soda business.
Quarterly profit totaled $1.11 billion, or 65 cents per share, up from $985 million, or 58 cents per share, a year earlier.
Revenue jumped 15 percent to $10.1 billion from $8.8 billion, helped by one extra selling week compared with last year.
PepsiCo’s earnings matched analysts’ forecast of 65 cents per share, according to Thomson Financial, while revenue topped the estimate of $9.57 billion.
The world’s second-largest soft-drink maker said in a conference call Wednesday it is continuing to step up its focus on healthier products while keeping a balance of what it calls “indulgence” items.
PepsiCo owns Frito-Lay, maker of some of the world’s best-known snacks, including Doritos, Fritos, Lay’s and Ruffles.
Sales at Frito-Lay North America rose 13 percent during the quarter, to $3.23 billion. The segment’s operating profit growth was somewhat offset by higher energy and raw-material costs and higher advertising expenses, PepsiCo said.
Steven Reinemund, president and chief executive, said in a conference call that acquisitions are helping the company get into health and wellness items – a “huge upside opportunity for growth.”
PepsiCo bought Sakata Rice Snacks in Australia, snackmaker Stacy Pita Chip in the U.S. and Sara Lee Corp.’s nut business in certain locations in Europe.
As the trend toward healthier drinks grows, PepsiCo and rival Coca Cola Co. are struggling to invigorate carbonated- beverage sales, especially in North America.
“The carbonated-soft-drink category has slowed in recent years,” said John Sicher, editor and publisher of Beverage Digest, an industry publication.
Most of the growth, he added, is in bottled water and sports drinks as well as the smaller but highly profitable energy- drink category.
Coca-Cola’s fourth-quarter earnings, reported Tuesday, also received a boost from noncarbonated-drink sales. Excluding one-time items, the company’s earnings came in slightly above Wall Street’s estimates.
PepsiCo is showing slightly stronger growth than Coca-Cola in the U.S., largely because of Gatorade, Sicher said, adding that Coke’s Powerade also is experiencing solid momentum.
