PepsiCo Earnings Preview: Frito-Lay Gains Offset Higher Corn Costs And Increased Marketing Expenses
By Malik Singleton | April 17, 2013 7:44 PM EST
Global beverage and snack giant PepsiCo Inc. (NYSE:PEP), which makes the eponymous soft drink, Quaker oatmeal and Tropicana orange juice, among many familiar products, is expected to report modest gains in its first-quarter profit and earnings per share as stronger revenue from its Frito-Lay North America division offset higher raw materials and marketing costs.
The Purchase, N.Y., company will report net income of $1.09 billion, up 8.7 percent from the year-earlier figure, and earnings per share of 71 cents compared with 69 cents in the first quarter of last year, according to a Thomson Reuters survey of analysts. Revenue is expected, on average, to be $12.60 billion, up 1.4 percent from the year-earlier level of $12.43 billion.
Frito-Lay North America is expected to be among the quarter's best performers, said Barclays Research. The London-based bank said the division "has begun gaining volume and value market share in early 2013, after lagging the industry in recent years." Specifically, volume is forecast to be 4 percent higher and comparable sales to be up 4.5 percent. Pricing, meanwhile, is seen rising at 2 percent to 3 percent in the first quarter.
The company's Latin American operations also are expected to boost earnings, despite a setback from Venezuela's devaluation of its currency. Barclays expects an organic sales jump of 7 percent and a reported sales increase of 0.5 percent. PepsiCo's businesses in Asia, the Middle East and Australasia should report a 10 percent organic sales increase.
The robust performance of PepsiCo's snack business and its Latin American operations are expected to modestly offset higher corn costs from last summer's U.S. drought and increased spending on marketing.
PepsiCo, the world's second-largest beverage and snack business, gets 65 percent of its business from developed markets and another 35 percent from developing and emerging markets that include Mexico, Brazil, Russia, China and India.
To contact the editor, e-mail:
Most Popular Slideshows
- Flight MH17 Attack: Russians Claim 'Putin A Terrorist,' Memorial at Dutch Embassy Overflows [PHOTOS]
- Typhoon Rammasun Claims 18 Lives in China, Incurs $4.32B Losses (PHOTOS)
- Ellen DeGeneres Caught Cheating with Mutual Friend Before Portia de Rossi’s Rehab – Reports [PHOTOS]
- Malaysia Airlines MH17: Vital Black Boxes Finally Land in Hands of Malaysian Authorities, Rebels Announce Ceasefire (PHOTOS/VIDEOS)
Join the Conversation
- California Fruits Recalled in USA and Canada for Possible Listeria Contamination
- Malaysian Airlines Flight 17: Air Carrier Losing $1.6 Million/Day; Crisis Management Experts Suggest Hiring Risk Expert as CEO
- The IBM and Apple Merger: Will it Spell Trouble to Rival Companies
- CBA, NAB, Westpac in Fixed Rate War Offering Below 5% Interest
- Radio Australia Cuts to Affect Isolated Vanuatu Residents Who Rely on It for Weather Bulletins
- Samsung Galaxy Note 4 Apps Leak Online, Five Fresh Features to Expect from the Android Smartphone
- Moto 360 Price Speculations, Key Features, Strategic Release Date, Design: A Watch That is More Than Just Time
- Windows Phone 8.1 Update Rollout: 20 Nokia Lumia Phones Eligible and 13 New Features to be Added
- Three New Moto G Successors Spotted in FCC Document Dubbed Moto G2, Moto M and More --Reports
- iPad Air 2 Release Date Will Skip IGZO Panel; To Rollout with Super-Slim iPad Mini Air
- Upcoming iPad Mini 3 Could be 30% Thinner and Likely be Called iPad Mini Air; Apple Q3 Results Show 9% Decrease in iPad Sales
- Sony Xperia M2 vs. Moto G – Specifications, Features and Price Showdown