PURCHASE, NY --- PepsiCo said higher commodity costs led to a 5% drop in profit during the fourth quarter to $1.37 billion, or 85¢ a share, from $1.43 billion, or 90¢ per share, a year earlier. Revenue jumped 37% to $18.16 billion.
Helped by increased sales volume and the acquisition of two of its biggest bottlers [see story], sales volume for the company's North American beverage business was up 1%, excluding the impact of selling additional Dr Pepper brands [see story].
PepsiCo's North American Frito-Lay snack business volume was flat, while revenue improved 3%. At its Quaker Foods North America segment, volume fell 1% and revenue dropped 4%.
The snack and soft drink giant lowered its full-year outlook, citing the ongoing pressures of rising commodity costs and a weak economy, which it said will make it difficult to raise prices on drinks and snacks enough to offset the higher costs. The company is now targeting earnings per share growth of 7% to 8%, compared with a previous forecast of 10% to 11%.