NEW YORK (AP) — PepsiCo Inc.'s first-quarter net income fell slightly from a year ago, as the food and beverage giant raised prices to make up for rising commodity costs.
The maker of soda, Tropicana juice and Doritos tortilla chips earned $1.13 billion, or 71 cents per share, in the first three months of the year. That compares with $1.14 billion, or 71 cents per share, in the same period last year. The number of average outstanding shares in the quarter lifted the latest per-share results.
Not including one-time items, the company says it earned 69 cents per share, which topped Wall Street expectations for 66 cents per share.
Like many other food and beverage companies, PepsiCo is struggling to balance higher commodity costs without scaring off budget-conscious consumers with too many price increases. The company says it was able to raise prices in the latest quarter on the strength of its brands.
Overall, PepsiCo, based in Purchase, N.Y., said its changes to pricing and packaging of its snacks and drinks boosted revenue by 5 percent in the quarter. That helped offset a $300 million increase in costs for ingredients.
With the new pricing measures in place, CEO Indra Nooyi said PepsiCo can focus on its plans to rejuvenate its business in the year ahead. That will include increased advertising dollars for its flagship brands and the implementation of a cost-cutting program.
PepsiCo incurred restructuring charges of $33 million in the quarter. The company said it anticipates additional charges of about $392 million for the rest of the year.
Revenue increased to $12.43 billion, from $11.94 billion a year ago; analysts had expected $12.35 billion, according to Fact Set.
The increase was driven primarily by gains in emerging markets, while revenue from the company's beverage unit in the Americas dipped by 2 percent.
In addition to its namesake soda, PepsiCo's portfolio of brands includes Tropicana, Gatorade and Quaker Oats. Its Frito-Lay unit makes it the world's biggest savor snack maker.