PepsiCos Cost Cuts And Price Hikes Boost Q2 Performance

PURCHASE, NY -- PepsiCo Inc. reported better-than-expected second-quarter revenue and profit, with cost cuts and price hikes offsetting sluggish volume.

The snack-and-beverage giant said reduced costs helped keep profit in line with last year, with net income in the second quarter holding even at $1.98 billion, or $1.33 a share, for the three months ended June 13. Revenue rose by a higher-than-expected 5.1% in constant-currency terms, helped by price hikes across the globe.

Global snack volume rose 1%, outperforming level beverage volume. Frito-Lay North America sales climbed 2%. North America soda volumes declined 3% during the second quarter. A 4% increase in non-soda North America volumes during the quarter was driven by water and Gatorade.

PepsiCo has been raising prices in the U.S., helping snack revenue grow 3% and operating profit rise 7%. U.S. beverage pricing grew an estimated 4%.

Boosting its full-year profit forecast, PepsiCo now expects full-year earnings per share to climb 8% on a constant-currency basis. Its prior guidance was for a 7% increase.