PepsiCo topped third-quarter profit estimates and raised its annual forecast after sales of its snacks and drinks in North America outweighed weaker results abroad.
Core earnings were $1.40 a share in the third quarter, the Purchase, New York-based company said in a statement on Thursday.
Analysts had estimated $1.32, on average. Currency fluctuations weighed on sales, though, sending them down 1.9 per cent in the period.
PepsiCo's North America beverage and Frito-Lay divisions boosted the company's results in the quarter, even as the strong dollar hurt sales abroad.
Excluding currency effects, revenue would have grown 4.2 per cent last quarter. The company - the world’s largest snack maker and second-largest non-alcoholic beverage maker - has benefited from the relative strength of US consumers, as well as cost-cutting measures that have helped profitability.
"Our product portfolio, geographic mix and capability centres are enabling us to deliver balanced revenue and productivity," chief executive Indra Nooyi said in the statement.
PepsiCo now expects core earnings of $4.78 a share this year, compared with a previous forecast for $4.71.
Shares Rise
The shares rose as much as 2.9 per cent to $110.49 in early trading in New York Thursday after the results were released.
The stock had been up 7.5 per cent this year through Wednesday’s close. Even with the decline last quarter, PepsiCo’s sales of $16 billion still topped the $15.8 billion estimated by analysts.
The Frito-Lay division led the way, with revenue climbing 3.4 per cent to $3.68 billion. Sales in the North America Beverages unit, PepsiCo’s largest business, rose 2.9 per cent to $5.52 billion.
Revenue fell in all of PepsiCo's other units, except for the Asia, Middle East and North Africa division, where it gained 0.2 per cent.
Frito-Lay and North America Beverages also turned in the strongest profit performances of the company’s divisions.
Both units were helped by lower raw-material costs and increases in productivity. Operating profit in the snacks division rose 5.8 per cent to $1.15 billion, while earnings in the drinks business increased 5.1 per cent to $904 million.
