PepsiCo earnings beat forecast as India sales grow in double digits
13 Oct 2014
PepsiCo Inc raised its full-year earnings per share helped by double-digit growth in the beverage maker's India revenues, making the country amongst the fastest growing emerging markets for the global beverages and snack giant.
India has been one of the top five markets of PepsiCo with eight of its brands clocking sales of over Rs1,000 crore in the market. The company has 42 plants across India that bottle and distribute aerated drinks like Pepsi, 7UP, Mirinda and Mountain Dew. Besides, it sells snacks under brands Lehar, Uncle Chips and Kurkure.
The company reported a net income of $2 billion for the quarter ended 30 September 2014, up 5 per cent from the prior-year period, resulting in $1.32 in earnings per share and a 7 per cent increase over earnings reported this time last year. Excluding special items, earnings per share came in at $1.36, beating the Street consensus by 7 cents.
The company, however, did not divulge country-wise revenues and profits.
At the start of 2014, PepsiCo had said it expected two-thirds of its revenue growth this year to come from developing countries.
India has been a "high priority market" for PepsiCo and the company had in November 2013, announced plans to invest Rs33,000 crore in India by 2020 to ramp up operations.
"Our developing and emerging markets business has proven to be resilient with high single-digit organic revenue growth year-to-date, including double-digit growth in Egypt and India," PepsiCo Inc chairman and CEO Indra Nooyi said in an earnings call.
"Even though the political environments are relatively stable, GDP and consumer spending growth remains mixed. Despite these challenges, our businesses performed well in the third quarter and year-to-date," she added.
Other developing markets for the company such as China, Brazil and Turkey recorded high single digit growth while revenue in Russia grew in mid single-digit.
During the third quarter ended 6 September 2014, PepsiCo's Asia Middle East and Africa (AMEA) region reported 11 per cent in organic revenue and net revenue. It also saw an 11 per cent volume growth in snack sales and a 3 per cent rise in beverage volumes.
Globally, PepsiCo reported organic revenue growth of 3.1 per cent and net revenue growth of 2 per cent in the third quarter.
The company, which sells Pepsi cola besides beverage brands like Mountain Dew and Tropicana and snacks such as Frito-Lay, reported a net income of $2 billion, or $1.32 a share, in the third quarter ended 6 September, up from $1.9 billion, or $1.23 a share a year earlier.
Meanwhile, spurred by the success of its snacks, PepsiCo has announced plans to come out with a Diwali special gift pack of its popular Kurkure brand designed by leading fashion designer, Manish Arora.