FILE - In this April 23, 2018, photo, Pepsi soft drink bottles are displayed at a store in Windham, N.H. PepsiCo Inc. reports earns on Tuesday, July 9, 2019. AP Photo/Charles Krupa, File)

PepsiCo tops 2Q forecasts on strong snack sales

July 09, 2019 - 7:16 am

PURCHASE, N.Y. (AP) — PepsiCo is reporting better-than-expected profit and revenue as the company continues its shift to healthier snacks and drinks under a new CEO.

Organic revenue — which doesn't include acquisitions — rose 4.5 percent, a slower pace than the first quarter. CEO Ramon Laguarta has said Tuesday that he expects that growth to continue to slow this year, partly due to sluggish demand for soda.

Laguarta took over following the departure of longtime CEO Indra Nooyi in October. Nooyi begun the push for "good for you" options that people don't feel as guilty eating, such as Baked Lay's potato chips and Naked juices made of fruits and vegetables. The company has not abandoned sugary sodas or more indulgent snacks, but has followed the changing tastes of customers.

The Purchase, New York, company posted second quarter earnings of $2.04 billion, or $1.44 per share. The per share earnings were $1.54 when adjusted for one-time items, or a nickel better than Wall Street had expected, according to a survey by Zacks Investment Research.

Revenue was $16.45 billion, also beating analyst forecasts for $16.39 billion.

Sales rose 4.5 percent to $4 billion at Pepsi's Frito Lay North America division, but North American beverage sales fell slightly to $5.3 billion. Sales were flat in Latin America, Europe, Asia and Africa.

Pepsi expects organic revenue growth of 4 percent for the year.

The company also maintained its guidance for full-year earnings. It expects those to fall 1% to $5.50 per share as it spends more heavily on supply chain improvements and marketing. Industry analysts have been projecting 2019 per-share earnings of $5.53.

Pepsi's are up just over 1% before the opening bell.

PepsiCo shares have climbed 20% since the beginning of the year, double that of rival Coca-Cola Co.

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Portions of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on PEP at https://www.zacks.com/ap/PEP

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