Pepsi Bottling Group Inc on Tuesday posted better-than-expected profit as strong sales of Aquafina bottled water and Lipton Ice Tea brands in North America offset rising raw material and fuel costs.
The largest bottler of Pepsi drinks also affirmed its previously announced 2006 earnings outlook. The company posted net income of $34 million, or 14 cents a share, compared with $39 million, or 15 cents a share, a year earlier. On that basis, earnings were 3 cents ahead of analysts' average forecast of 11 cents a share, according to Reuters Estimates.
Excluding the stock option expense, Pepsi Bottling's profit was 18 cents a share. The company, which is 43 percent owned by PepsiCo Inc, the world's No 2 soft-drink company, said revenue rose to $2.37 billion from $2.15 billion and ahead of analysts' expectations of $2.29 billion.
In the United States, sales of noncarbonated beverages, excluding water, grew more than 20 percent during the quarter while sales of Aquafina water grew about 35 percent, the company said.
Bottlers and soft-drink companies are trying hard to woo consumers, who are moving away from sugary soft drinks to diet versions or to healthier low- or no-calorie beverages such as water and orange juice with reduced sugar.
While soft-drink volume sales fell for the first time in two decades in 2005, energy drinks posted strong growth, according to a recent report by industry newsletter Beverage Digest.
Pepsi Bottling said first-quarter sales by volume, a key gauge of performance in the beverage industry, rose 6 percent world-wide as well as in the United States and Canada.
The company said worldwide net revenue per case grew 4 percent, fuelled by price increases in the United States that helped offset a nine-percent jump in selling, delivery and administrative expenses due to higher-than-expected volume growth, investments in Europe and higher fuel and pension expenses.