PURCHASE, N.Y. — Strength in the Frito-Lay North America and Latin America Foods units offset a decline in Quaker Foods North America, leading to a 6% increase within the PepsiCo Americas Foods unit of PepsiCo, Inc. in the first quarter ended March 23. At $1,224 million, operating profit for PepsiCo Americas Foods was up from $1,150 million in the first quarter of fiscal 2012. Net revenue in the division increased 5%, rising to $5,124 million from $4,868 million.
Frito-Lay North America, the largest segment within PepsiCo Americas Foods, posted an operating profit of $828 million in the first quarter of fiscal 2013, up 6% from $780 million a year ago. Net revenue also was higher, climbing 4% to $3,123 million from $3,010 million. The unit’s market share in the United States grew in the quarter, reflecting 4% volume growth driven by strategic investments and disciplined execution, PepsiCo said.
First-quarter operating profit at Quaker Foods North America fell to $180 million, down 4% from $187 million a year ago. Net revenue, meanwhile, increased 2% to $634 million from $623 million.
Latin America Foods operating profit was $216 million in the first quarter of fiscal 2013, up 18% from $183 million a year ago. Net sales rose 11% to $1,367 million from $1,235 million.
Overall, net income at PepsiCo, Inc. in the first quarter ended March 23 totaled $1,075 million, equal to 69c per share on the common stock, down 5% from $1,127 million, or 71c per share, in the same period a year ago. Net revenue was $12,581 million, up 1% from $12,428 million.
Looking ahead to the remainder of 2013, PepsiCo said it expects low-single-digit commodity inflation and productivity savings of approximately $900 million. The company also expects advertising and marketing expense to increase at or above the rate of net revenue growth. Below the operating profit line, the company expects higher interest expense driven by increased debt balances and a core effective tax rate of approximately 27%.
The company is targeting over $9 billion in cash flow from operating activities and more than $7 billion in management operating cash flow (excluding certain items) in 2013. Net capital spending is expected to be approximately $3 billion in 2013, which is within the company’s long-term capital spending target of less than or equal to 5% of net revenue.The company said it expects to return a total of $6.4 billion to shareholders in 2013 through dividends of approximately $3.4 billion and share repurchases of approximately $3 billion.