PepsiCo Inc beat profit expectations on Thursday as a booming snacks unit added pep to sales and its struggling North American soda business did better than expected, sending shares up more than 2 percent in premarket trading. The maker of Pepsi-Cola, Frito-Lay snacks and Tropicana juice said that excluding the impact of currency translation and changes to PepsiCo's business, quarterly revenue rose 4 percent.
Overall revenue in the first quarter ended March 22 was $12.62 billion, above the $12.43 billion Wall Street was expecting, according to Thomson Reuters I/B/E.S. A weaker spot for the company continued to be soda sales in North America, where soft drink volume fell 1 percent as consumers switched to healthier non-carbonated juices and health drinks. But analysts were expecting a decline of 2.7 percent, according RBC Capital Markets analyst Nik Modi.
According to a recent report by industry publication Beverage Digest, PepsiCo lost 0.4 percentage points of its market share in 2013, while Coca Cola said an increase. PepsiCo's soda problems have led activist investor Nelson PepsiCo's sales of food in the Americas rose 5 percent, led by gains in Latin America. Total snacks volume grew 2 percent.
The company said net income was $1.22 billion, or 79 cents per share, in the first quarter, up from $1.08 billion, or 69 cents per share a year earlier. Excluding items such as restructuring charges, PepsiCo earned 83 cents per share, 8 cents more than analysts expected.