By Martinne Geller
(Reuters) – PepsiCo Inc and Coca-Cola Enterprises reported higher-than-expected quarterly profits and stood by their full-year forecasts, helped by price increases on sodas.
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 from $1.14 billion, or 71 cents per share, a year earlier.
Excluding items, earnings were 69 cents per share, in line with management’s expectations, but 2 cents ahead of analysts’ estimates, according to Thomson Reuters I/B/E/S.
Net revenue rose 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.
The company stood by its 2012 outlook, which calls for earnings to fall 5 percent from the $4.40 per share reported for 2011. PepsiCo expects net revenue growth in the low single-digit percentage range for this year.
For PepsiCo, 2012 is a transition year as it ramps up marketing, cuts thousands of jobs and streamlines its portfolio in a bid to improve performance, especially in its North American drink business.
The company has lagged Coca-Cola Co as even its flagship Pepsi-Cola has fallen to No. 3 among soft drinks in the United States, behind Coca-Cola and Diet Coke.
Also on Thursday, Coke Enterprises reported first-quarter earnings of 36 cents per share, topping the analysts’ average estimate of 33 cents, according to Thomson Reuters I/B/E/S.
The company, which bottles Coca-Cola Co drinks in Europe, also affirmed its full-year forecast for earnings per share to rise about 10 percent.
(Reporting By Martinne Geller in New York; Editing by Lisa Von Ahn)