PepsiCo Americas Foods profit rises 1% in Q3

by Eric Schroeder
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PURCHASE, N.Y. — Operating profit within PepsiCo Americas Foods unit rose 1% to $1,152 million during the third quarter, as strength at Frito-Lay North America more than offset declines at Quaker Foods North America and Latin America Foods.

F.L.N.A. operating profit in the third quarter ended Sept. 5 was $822 million, up 5% from $785 million during the same period of fiscal 2008. Revenue in the segment was $3,198 million, up 5% from $3,057 million. For the first nine months of fiscal 2009, operating income was $2,302 million, up 7% from $2,153 million, while sales also rose 7% to $9,336 million.

"Volume growth (3%) reflected high single-digit growth in brand Lay’s, combined with strong gains in F.L.N.A.’s joint venture with Sabra and in variety packs," the company said. "Product innovation highlights included Baked Lay’s inclusions, as well as successful additions of Sabritas-derived flavors to our Ruffles and Fritos lines."

PepsiCo attributed the gain in operating profit to investments in value as well as the overlapping of price increases in the year-ago period.

Q.F.N.A. operating profit in the third quarter was $131 million, down 1% from $134 million in the same period a year ago. Sales, meanwhile, rose 7% to $418 million. For the first nine months of fiscal 2009, operating profit was $438 million, up 4% from $422 million, while sales were $1,299 million, up from $1,292 million.

The company said volume within the Q.F.N.A. unit rose 8%, reflecting the overlap of last year’s flood-related production disruptions at its Cedar Rapids, Iowa, manufacturing facility.

Operating profit at Latin America Foods fell 11% during the quarter to $199 million on a 10% decline in sales. For the first nine months of fiscal 2009, operating profit was $603 million, down 7% from $646 million in the same period a year ago. Net sales were $3,641 million, down 10% from $4,038 million.

Companywide, PepsiCo net income in the third quarter totaled $1,705 million, equal to $1.08 per share on the common stock, up from $1,688 million, or $1.06 per share, during the same period of fiscal 2008. Net revenue was $11,080 million, down from $11,244 million. For the first nine months of fiscal 2009, net income was $4,424 million, or $2.81 per share, down from $4,499 million, or $2.79 per share. Net sales for the first nine months were $29,935 million, down 2% from $30,522 million.

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