Pepsico Records Strong Profit; Quaker Foods Affected by Price Volatility

PepsiCo has announced its third quarter 2018 (quarter ended September 8) financial results, revealing an important growth for the company. Pepsico CEO Indra Nooyi left the giant company posting a stronger-than-expected quarterly profit on her last day on the job.

Reported net revenue increased 1.5%, while foreign exchange translation had a 2-percentage point unfavorable impact on reported net revenue growth. Organic revenue, which excludes the impacts of foreign exchange translation and acquisitions, structural and other changes, grew 4.9%, according to the report.

Despite the emergent markets, which brought important growth and the Frito-Lay North America (where the operating profit increased by 3.5%,), Quaker Foods North America did not record growth.

At Quaker Foods North America (QFNA), which produces a wide range of cereal-based products, the operating profit decreased by 1.5%, reflecting certain operating cost increases and unfavorable net pricing and mix, as well as higher commodity costs, which negatively impacted operating profit performance by 2.5% percentage points. These impacts were partially offset by planned cost reductions across a number of expense categories, lower advertising and marketing expenses and the volume growth. Additionally, insurance settlement recoveries related to the 2017 earthquake in Mexico positively contributed 2 percentage points to operating profit performance.

“We are pleased with our results for the third quarter. We continued to see a very strong operating performance from our international divisions, propelled by developing and emerging markets; Frito-Lay North America generated solid net revenue and operating profit growth; and North America Beverages delivered another quarter of sequential improvement in top-line performance. On the strength of our year-to-date results, we have revised upward our full-year organic revenue growth target. Additionally, given the recent strengthening in the U.S. dollar we have revised our full-year core earnings per share target to reflect our updated expectation of an approximate 1 percentage point headwind from foreign exchange translation,” said chair and CEO Indra Nooyi.