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Issue Date: Vol. 52, No. 8, August 2012, Posted On: 7/25/2012


PepsiCo Q2 Profit Falls 21%, Revenue Dips 2.2%


Emily Jed
Emily@vendingtimes.net
TAGS: vending, vending machine, PepsiCo 2012 second-quarter, Pepsi-Cola, Pepsi, Frito-Lay, PepsiCo Americas Foods, PepsiCo revenue, PepsiCo Americas Beverages, snack food

PURCHASE, NY -- PepsiCo posted declines in profit and revenue in the second quarter, hit by the stronger U.S. dollar and beverage refranchising transactions in China and Mexico.

Second-quarter income was $1.49 billion, or 94ยข a share, down 21% from $1.89 billion, or $1.17 per share, a year earlier. Revenue fell 2% to $16.5 billion from $16.83 billion.

As a result of a strong dollar, sales in other countries translate into fewer dollars for PepsiCo back home, as it takes more local currency to buy a dollar. PepsiCo's second-quarter performance was also hit by new partnerships with local beverage companies in China and Mexico to distribute its drinks, since revenue is now recorded by those companies.

Higher prices helped organic sales rise 5%. PepsiCo Americas Foods' organic revenue rose 7%, while PepsiCo Americas Beverages' organic revenue increased 2%.

Price increases were met by slower volume in the company's Americas beverage business, which fell 1%. Frito-Lay volume in North America was also flat.

PepsiCo's Europe business posted organic revenue growth of 3%.

PepsiCo boosted its advertising spending by more than 40% in the U.S. in the latest quarter compared with a year earlier, including the launch of its first global campaign for Pepsi-Cola.

The Purchase, NY, company is also seeking to boost sales by moving into new categories. It recently started selling yogurt in the U.S. under a joint venture with German dairy company Theo Muller Group. | SEE STORY


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