Despite mixed economic conditions around the globe during the second quarter, people apparently were still comfy spending a few bucks on a soda and a bag of chips. Beverage giant PepsiCo reported Thursday that second-quarter adjusted earnings rose 6% from the prior year to $1.35 a share, easily beating Wall Street estimates of $1.30 a share. Net revenue fell 3.3% year over year to $15.4 billion, held back by a four percentage point hit due to volatile currency conditions. Analysts had expected revenue of $15.37 billion. The company lifted its full-year earnings outlook to $4.71 a share from a previous outlook of $4.66. Revenue excluding the impact of currency fluctuations, which PepsiCo refers to as organic revenue, is still seen rising 4% on the year. ‘I think what you are seeing is a consistently slow growth rate around the world,’ PepsiCo Vice Chairman and CFO Hugh Johnston told TheStreet, continuing, ‘As we entered the year, we were more concerned you would see more of a drop off and frankly, we just haven’t seen that happen.’ PepsiCo’s volume rose in all geographic regions except for North American beverages and Latin America, where it fell 1% and 2%, respectively, from the prior year. Operating profit, which continues to be boosted by PepsiCo’s aggressive cost-cuts and raw material price deflation, increased 4% from a year ago on a constant currency basis. The profit performance was led by 11% and 8% gains for Quaker Foods North America and Frito-Lay North America, with the only region to deliver a decline being Latin America (-12%). One thing unlikely on PepsiCo’s radar screen right now as a way to boost profit is a major acquisition along the lines of Danone spending over $12 billion to buy organic food player WhiteWave or Mondelez bidding over $23 billion for Hershey . ‘We feel like now we are operating from a position of strength,’ said Johnston on PepsiCo’s appetite to do a big deal, adding, ‘In terms of some of these bigger deals that have been announced out there, if we haven’t done a deal I think you could assume that’s because we don’t think it’s in our shareholder’s interest.’ TheStreet’s Brian Sozzi reports from New York City.
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