* PepsiCo Q1 adj EPS $0.69/share vs. Street's $0.67
* PepsiCo revenue up 4 pct to $12.43 bln
* Stands by 2012 outlook, earnings to fall 5 pct
* Coke Enterprises also beats, affirms 2012 outlook
* Pepsi shares down 0.2 pct; Coke Ent. down 0.3 pct
(Adds share price, analyst comment)
By Martinne Geller
April 26 PepsiCo Inc and Coca-Cola
Enterprises reported higher-than-expected quarterly
profits, helped by price increases on sodas, and stood by their
For PepsiCo, 2012 is a transition year as it ramps up
marketing, cuts thousands of jobs and streamlines its portfolio
to improve its performance, especially in its North American
"As the year progresses, quarter by quarter, you'll start
seeing the business strengthen," PepsiCo Chief Executive Indra
Nooyi said on a conference call on Thursday.
Though its results beat expectations, PepsiCo shares fell
slightly in morning trading on the New York Stock Exchange,
dropping 0.2 percent to $66.50.
"Expectations were low and sentiment is still fairly
negative," said JP Morgan analyst John Faucher. "We don't think
that most skeptics will be convinced yet."
PepsiCo, maker of Frito-Lay snacks, Quaker oatmeal and
Tropicana orange juice, said results were in line with its own
expectations in the quarter, during which commodity cost
inflation was at the highest rate expected for the year.
The company said it made progress on a range of initiatives
in the first quarter, including innovation and advertising.
It launched Pepsi Next, a mid-calorie cola that it said is
performing better than expected. It also boosted spending on
media advertising by 25 percent. Overall, marketing spending as
a percentage of sales is expected to rise by half a percentage
point to 5.7 percent this year.
Like most food and beverage companies, PepsiCo and Coke
Enterprises raised prices to offset higher commodity costs. But
those price increases can often hurt sales volume.
PepsiCo said net income was $1.13 billion, or 71 cents per
share, in the first quarter, down slightly from $1.14 billion,
or 71 cents a share, a year earlier.
Excluding items, earnings were 69 cents per share, in line
with management's expectations, but 2 cents more than analysts'
estimates, according to Thomson Reuters I/B/E/S.
Net revenue grew 4 percent to $12.43 billion, driven by
price increases. Currency exchange rates reduced revenue growth
by 1 percentage point.
Volume rose 2 percent in the company's Americas Foods unit
as strength in Latin America offset declines at the North
American units of Frito-Lay and Quaker Foods. The Americas
Beverages unit's volume fell 1 percent.
PepsiCo stood by its 2012 outlook for earnings to drop 5
percent from $4.40 a share in 2011. It expects net revenue
growth in the low single-digit percentage range this year.
Also on Thursday, Coke Enterprises reported first-quarter
earnings of 36 cents per share, topping analysts' average
estimate of 33 cents, according to Thomson Reuters I/B/E/S.
The company, which bottles Coca-Cola Co drinks in
Europe, affirmed its full-year forecast for earnings per share
to grow about 10 percent.
Coke Enterprises shares were down 0.3 percent at $29.05 in
morning trading on the New York Stock Exchange.
(Editing by Lisa Von Ahn and Bernadette Baum)