PURCHASE, NY -- PepsiCo's growing international business and a round of price increases helped drive third quarter profits up 4%. Sales volume of both snacks and beverages climbed during the period.
The maker of Lay's chips, Mountain Dew and Gatorade earned $2 billion, or $1.25 per share, for the quarter ended Sept. 3, an increase over the $1.92 billion, or $1.19 a share, garnered during the comparable 2010 period. Quarterly revenue climbed 13% to $17.58 billion from $15.51 billion a year ago.
Overall, global snacks volume increased by 8% and worldwide beverage volume grew 4%.
In North America, revenue in PepsiCo's Frito-Lay business increased 4%, driven by strong sales of its Lay's Doritos, Cheetos and Ruffles brands. Quaker Foods North America revenue improved by 2%, resulting from higher prices and cost controls.
PepsiCo Americas Beverages volume increased slightly. Net revenue rose 3%, helped by price increases. Mid-single-digit volume growth in noncarbonated beverages offset declines in carbonated soft drinks. Gatorade led volume growth for noncarbonated beverages in North America.
The company's largest revenue gains came from overseas. PepsiCo European markets reported a 37% revenue increase due to higher prices and the addition of Russian juice and dairy company Wimm-Bill-Dann. Revenue for Asia, the Middle East and Africa rose 25%. The Latin America Foods division, led by Brazil and Mexico, posted a 19% increase in revenue.
PepsiCo said it will implement more price hikes in the fourth quarter on select products and in certain regions.
The company reaffirmed its guidance for the year, which calls for 2011 earnings to grow at a high single-digit rate. It is waiting until December to issue its 2012 guidance in order to gauge commodity prices, the state of the economy and consumer response to higher prices.
PepsiCo said last month that it is combining its drinks and snack businesses. It also announced several senior executive changes in a bid to regain lost sales in a weak economy and as flagship Pepsi-Cola slipped to No. 3 in U.S. volume behind Diet Coke and longtime leader Coke last year for the first time. | SEE STORY