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PepsiCo's Q3 revenue drops 1.9%

DBR Staff Writer Published 30 September 2016

PepsiCo has reported a 1.9% decline in its net revenue to $16.03bn for the third quarter of this year, compared to $16.33bn for the same period last year.

Net income attributable to the company surged 274% to $1.99bn, from $533m last year.

Revenues from Frito-Lay North America and North America Beverages were benefited by productivity gains and lower raw material costs.

PepsiCo’s earnings from its drinks sector increased to $904m at 5.1%.

PepsiCo chairman and CEO Indra Nooyi said: "We are pleased with our results for the third quarter and year to date. Our product portfolio, geographic mix and capability centers are enabling us to deliver balanced revenue and productivity.

"Based on our year-to-date performance and our outlook for the fourth quarter, we are raising our full-year core constant currency EPS growth objective."

The company’s North America beverages unit’s revenue surged 3% to $5.52bn.

Key performers for PepsiCo in its beverage segment include Propel flavored-water, Naked Cold Pressed juice and Lipton Pure Leaf tea which continued to help sales grow in recent quarters.

This is the eight quarter in a row that PepsiCo’s revenue had declined owing to high inflation in some of the Latin American countries like Venezuela and Argentina. In Europe as well, sales have gone down because of weak demand for the company's products.

PepsiCo said that its multi-year cost-cutting plan has benefited in yielding an above-expectations revenue. As part of the cost-cutting steps, the company had closed some of its plants, simplified its organization structure while investing in manufacturing automation.

After announcing the results, the company has spiked its full-year adjusted profit forecast from $4.71 per share to $4.78 per share.

Image : A consumer chooses from a cooler of Pepsi, Diet Pepsi, Diet Mountain Dew and Mountain Dew product. Photo : courtesy of Pepsico.