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PepsiCo Profit Rises 14%, Beats Expectations

April 24, 2002|From Reuters

PepsiCo Inc. said Tuesday that first-quarter profit jumped 14% as consumers snapped up more of its Frito-Lay snacks and Mountain Dew Code Red and Gatorade drinks.

The company said earnings before special items rose to $681 million, or 38 cents a share, from $597million, or 33 cents, a year earlier. The results beat the Wall Street consensus estimate by a penny a share.

Net income climbed to $651 million, or 36 cents a share, from $570million, or 32 cents, a year earlier. Sales climbed 4.9% to $5.1billion for the quarter ended March 23.

Chief Executive Steve Reinemund pointed to strong results in the company's largest divisions, Frito-Lay North America and Pepsi-Cola North America, and from Gatorade.

"Our international results were also healthy," he added, "despite the impact of adverse global macroeconomic conditions."

Purchase, N.Y.-based PepsiCo said it still expected earnings growth of 13% to 14% for the year.

PepsiCo shares fell 63 cents to $52.20 on the New York Stock Exchange. PepsiCo and rival Coke are trading near 52-week highs.

Analysts said Pepsi and Coke are benefiting from new products, which are boosting results in the competitive U.S. market even as many consumers shy away from mainstream colas.

The two top soft drink makers are both showing strength with lemon-flavored colas. Coke's Diet Coke With Lemon debuted last year, and Pepsi has both regular and Diet Pepsi Twist.

Pepsi's Mountain Dew Code Red, popular with young adults, will be followed by a diet version this summer. Pepsi said it also plans to introduce Lipton Brisk Lemonade, among other products, this quarter. Meanwhile, Coke will launch Vanilla Coke in the U.S. next month and is reintroducing its fruit-flavored Fanta brand.

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