PURCHASE, New York (AP) — PepsiCo Inc.'s first-quarter net income dropped 20 percent, partly on higher costs. But strong sales of its snacks and beverages and acquisitions helped push revenue higher.
The maker of Sierra Mist, Quaker oatmeal and Cheetos also reiterated a full-year earnings outlook below Wall Street expectations Thursday.
PepsiCo reported net income of $1.14 billion, or 71 cents per share, for the period ended March 19. That's down from $1.43 billion, or 89 cents per share, a year ago.
Adjusted earnings were 74 cents per share, meeting the expectations of analysts polled by FactSet.
The company indicated that its performance was pressured by higher commodity costs and that it spent more on brand building and infrastructure in emerging markets. PepsiCo has been eyeing emerging markets for growth.
Chairman and CEO Indra Nooyi said in a statement that the company had solid gains in Eastern Europe, Asia and the Middle East.
Revenue rose 27 percent to $11.94 billion, surpassing Wall Street's estimate of $11.84 billion.
PepsiCo's performance got a boost from the acquisition of two of its biggest bottlers and Russian dairy and juice company Wimm-Bill-Dann Foods.
Worldwide snacks volume climbed 3 percent, while beverage volume increased 12 percent.
Frito-Lay North America posted a 2 percent volume rise, helped by its Lay's, Ruffles, Doritos and Rold Gold brands as well as its Sabra joint venture. PepsiCo Americas Beverages volume gained 12 percent, with strong results from Pepsi Max and Gatorade.
The Quaker Foods North America segment posted an 8 percent volume decline, with softness in ready-to-eat cereals, side dishes and mixes.
PepsiCo, based in Purchase, New York, expects full-year earnings to rise between 7 percent and 8 percent, implying earnings of $4.42 to $4.46 per share. Analysts expect $4.48 per share.
PepsiCo lowered its outlook for the fiscal year in February. Its earlier forecast was for a rise of 10 percent to 11 percent.
Looking ahead, the company said it expects a high single-digit earnings-per-share increase beyond 2011.