Friday, October 31st8.2°C
21625
23004

PepsiCo raises forecast after profit beats Wall Street estimates; looks to new Lay's flavours

PURCHASE, N.Y. - PepsiCo raised its forecast for the year on Wednesday and said its new Lay's potato chips — including a cappuccino variety — should help boost its profit in the months ahead.

The company, which also owns Tropicana, Gatorade and Quaker, said global volume for both its snacks and drinks rose 1 per cent in the second quarter. The gains were relatively modest, but PepsiCo has been driving its financial performance with a cost-cutting plan expected to generate $1 billion in savings this year.

In its Frito-Lay North America division, PepsiCo said lower prices helped lift sales volume. Although the performance was muted, Chief Financial Officer Hugh Johnston noted in a phone interview that the unit is expected to benefit in the current quarter from the rollout of special flavours — Cappuccino, Mango Salsa, Wasabi Ginger and Bacon Mac & Cheese.

The varieties were recently announced as finalists for the company's annual "Do Us a Flavor" contest, which gives customers a chance to create a new variety that is sold nationwide. The chips have so far received mixed reviews, but the contest is designed to pique curiosity and drive people to stores.

Johnston said such special flavours are also more profitable for the company, even if the prices are the same as regular flavours. That's because PepsiCo puts fewer chips in those bags.

"There might be an ounce or two less," Johnston said.

A representative for PepsiCo said regular Lay's come in 10-ounce bags and flavoured Lay's come in 9.5-ounce bags. At those sizes, all bags have a suggested price of $4.29.

In its closely watched North American beverage business, soda volume fell 2 per cent while non-carbonated drinks rose 1 per cent. On Monday, Coca-Cola also said non-carbonated drinks rose 1 per cent, while soda volume was flat. The two companies have been struggling to boost beverage volumes in the region, given the growing competition from smaller players and the shift away from soda that has been underway for years.

PepsiCo now expects core earnings per share to rise 8 per cent from 2013, instead of the 7 per cent increase it previously forecast.

For the quarter, the Purchase, New York-based company said net income fell to $1.98 billion, or $1.29 per share. That was down 2 per cent from a year ago, as restructuring and impairment charges took their toll.

Adjusted for one-time charges, earnings were $1.32 per share, topping the $1.23 analysts expected, according to Zacks Investment Research.

Revenue edged up to $16.89 billion, matching Wall Street forecasts.

PepsiCo shares have increased $6.23, or 7.5 per cent, to $89.17 since the beginning of the year, while the Standard & Poor's 500 index has climbed 7.3 per cent. The stock has climbed $2.97, or 3.4 per cent, in the last 12 months.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14458.69-68.88
S&P CDNX771.65-9.42
DJIA17195.42221.11
Nasdaq4566.138+16.912
S&P 5001994.65+12.35
CDN Dollar0.8936+0.0002
Gold1174.00-24.60
Oil80.27-0.63
Lumber322.40-1.20
Natural Gas3.715+0.066

 
Okanagan Companies
Pacific Safety0.11+0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.150.00
Cantex0.045-0.015
Anavex Life Sciences0.1711-0.0089
Metalex Ventures0.0350.00
Russel Metals32.22-0.35
Copper Mountain Mining1.97-0.05
Colorado Resources0.14+0.005
ReliaBrand Inc0.012-0.004
Sunrise Resources Ltd0.05+0.025
Mission Ready Services0.375+0.005

 





FEATURED Property
18315585351 Ptarmigan Street, Kelowna, BC
5 bedrooms 4 baths
$684,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Empty nesting: financial issues

Now that the children have ‘left the nest’, it is a good time to step back and take stock of your financial situation. Being on your own will probably cut household costs to some extent, b...


Keep your haunted home safe

Eerie sounds, spooky lights and Jack-o’-lanterns aglow—extra efforts at Halloween will keep visitors coming back for both tricks and treats. However, to keep the fun going, it’s imp...


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...

_








Member of BC Press Council


23691