Profit up 2% in PepsiCo Americas Foods unit

by Eric Schroeder
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PURCHASE, N.Y. — Continued strength within Frito-Lay North America and Latin America Foods helped drive a 2% increase in operating profit in the PepsiCo Americas Foods unit of PepsiCo, Inc. in the first quarter ended March 22. Operating profit for PepsiCo Americas Foods rose to $1,254 million from $1,224 million during the first quarter of fiscal 2013. Revenue during the first quarter of fiscal 2014 increased 1% to $5,191 million from $5,124 million.

Organic revenue gains of 4% in the quarter, reflecting a 3-percentage point increase in organic volume and 1 percentage point of effective net pricing, boosted the Frito-Lay North America segment, which had an operating profit of $862 million, up 4% from $828 million during the same period a year ago. The segment had revenue of $3,219 million, up 3% from $3,123 million.

“Revenue growth in the quarter was led by good performance across our five largest brands — Lay’s, Tostitos, Doritos, Cheetos and Ruffles — and each grew between low- and mid-single digits,” Indra Nooyi, chairman and chief executive officer of PepsiCo, Inc., said during an April 17 conference call with analysts. “We continue to execute product and packaging innovation, targeted incremental macro-snack occasions, including the launches of Rold Gold Pretzel Thins, Twistos Snack Bites, Lay’s Air Pops, Lay’s Kettle Cooked Lattice Cut Chips and our Ready-To-Go market pack that also has a broad assortment of macro snacks.”

Operating profit for the Quaker Foods North America segment was $160 million, down 11% from $180 million during the same period a year ago. Revenue for the segment was $634 million, unchanged from a year ago. Ms. Nooyi did note the Q.F.N.A. segment delivered positive organic top line in the quarter and gained value share at retail in each of its core categories: hot cereal, ready-to-eat cereal and snack bars.

Latin America Foods operating profit was $232 million in the first quarter of fiscal 2014, up 7% from $216 million a year ago. Net sales fell 2% to $1,338 million from $1,367 million.

For the first quarter ended March 22, net income attributable to PepsiCo was $1,216 million, equal to 79c per share on the common stock, up 13% from $1,075 million, or 69c per share, during the prior year. Net revenue for the first quarter of fiscal 2014 rose only slightly to $12,623 million from $12,581 million.
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