PepsiCo Americas Foods profit up 7% in fiscal 2010

by Eric Schroeder
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PURCHASE, N.Y. — Operating profit within the PepsiCo Americas Foods unit of PepsiCo, Inc. rose 7% in fiscal 2010, driven by sharp gains in Latin America Foods and Frito-Lay North America, which more than offset a decline in Quaker Foods North America. Operating profit for P.A.F. in the year ended Dec. 25, 2010, was $5,121 million, up from $4,790 million in fiscal 2009.

Net sales rose 3.5% to $21,544 million from $20,811 million.

For the fourth quarter ended Dec. 25, 2010, operating profit at P.A.F. was $1,590 million, up 10% from $1,447 million, while sales were $6,709 million, up 3% from $6,535 million.

F.L.N.A. posted operating profit of $3,549 million in fiscal 2010, up 9% from $3,258 million in the same period a year ago. Revenue in the segment was $13,397 million, up 1% from $13224 million a year ago.

PepsiCo said the profit growth was the strongest for the F.L.N.A. unit in a decade and reflected benefits from lower input costs and strong productivity gains and cost control. For the full year, volume declined 1%, with unit growth up more than 1%.

Q.F.N.A. operating profit in fiscal 2010 was $568 million, down 10% from $628 million in fiscal 2009. Sales also fell, easing 3% to $1,832 million from $1,884 million.

“Performance for the quarter and full year reflected declines in the hot cereals and ready-to-eat cereals categories, and a competitive pricing environment,” PepsiCo said. “Q.F.N.A. invested in improving its quality and in innovation launched in the second half of 2010 that will continue to receive marketing support in 2011.”

In Latin America Foods, operating profit climbed 11% to $1,004 million from $904 million. Sales rose 11% to $6,315 million, up from $5,703 million. Broad-based volume gains, especially in Mexico and Brazil, drove the strength in the unit, PepsiCo said.

Companywide, net income in the year ended Dec. 25, 2010, totaled $6,320 million, equal to $3.91 per share on the common stock, up from $5,946 million, or $3.77 per share, during fiscal 2009. Revenue for the year was $57,838 million, up 34% from $43,232 million during the previous year.

For the fourth quarter ended Dec. 25, 2010, net income was $1,365 million, or 85c per share, down 5% from $1,434 million, or 90c per share, in the same period a year ago. Net sales were $18,155 million, up 37% from $13,297 million in the same period a year ago.

“We are pleased with PepsiCo’s performance in the fourth quarter and for the full year,” said Indra Nooyi, chairman and chief executive officer. “The underlying performance of our business remained solid despite a challenging macroeconomic environment. We posted broad-based worldwide gains in both snacks and beverages, our business deftly balanced a delicate price-value consumer equation, and we aggressively managed costs and productivity to deliver top-tier financial results.”

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