P.A.F. profit climbs 3% on strength in Frito-Lay

by Eric Schroeder
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PURCHASE, N.Y. — Operating profit within the PepsiCo Americas Foods unit of PepsiCo, Inc. rose 3% in the first quarter of fiscal 2010, boosted by strong gains at Frito-Lay North America that helped offset declines in the Quaker Food North America and Latin America Foods units. Operating profit for P.A.F. in the quarter ended March 20 was $1,068 million, up from $1,036 million in the first quarter of fiscal 2009.

Net sales rose 4% to $4,530 million from $4,352 million.

F.L.N.A. posted operating profit of $770 million in the first quarter, up 10% from $697 million in the same period a year ago. Revenue in the segment was $3,067 million, up 2% from $3,000 million a year ago.
During the first quarter, PepsiCo said the F.L.N.A. unit gained volume share and expanded margins. The company said the volume gains reflected strong performance in trademark Lay’s and variety packs, both of which grew volume share in their respective sub-categories.

“Outside the snack aisle, Stacy’s Pita Chips and Sabra dips continued to drive strong growth,” PepsiCo said. “In the quarter, F.L.N.A. introduced innovative, better-for-you snacking options for consumers, including all-natural versions of Lay’s potato chips and lightly salted versions of Fritos corn chips and Ruffles potato chips.”

Q.F.N.A. operating profit in the first quarter was $153 million, down 12% from $175 million in the same period of fiscal 2009. Sales also fell, easing 1% to $480 million from $485 million. PepsiCo said volume in the Q.F.N.A. unit was down 1% during the quarter.

Companywide, PepsiCo net income in the first quarter of fiscal 2010 totaled $1,430 million, equal to 89c per share on the common stock, up 26% from $1,135 million, or 72c per share, in the same period of fiscal 2009. Net sales rose 13% to $9,368 million from $8,263 million.

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