INTERNATIONAL - PepsiCo Inc., grappling with a slumping soda business, got another boost from its food operations.
The maker of Mountain Dew posted second-quarter profit that topped analysts’ estimates, helped by strong sales of Frito-Lay chips and Quaker oatmeal, according to a statement Tuesday. Core earnings per share were $1.61, 9 cents above analysts’ consensus estimate.
The results sent the company’s shares up 1.6 percent in early trading. The stock closed Monday at $107.76 in New York, down 10 percent for the year.
PepsiCo, like rival Coca-Cola Co., is looking beyond sugary soda to drive growth as consumers become more health-conscious. Chief Executive Officer Indra Nooyi has said fixing the struggling North American beverage unit is a top priority, but in the meantime the company is getting a boost from its food brands.
Consumer giants ranging from PepsiCo to Nestle SA are wrestling with changing tastes as shoppers turn away from sugary foods and drinks and seek out healthier fare. Consumption of carbonated soft drinks fell to a 32-year low in the U.S. last year, according to Beverage-Digest, a trade publication.
While chips have been less affected than sodas, PepsiCo has also introduced organic versions of some of its biggest snack brands, in addition to buying startup competitors like baked fruit and vegetable snackmaker Bare Foods Co.
Profit in the company’s Frito-Lay North America unit, which makes Cheetos and Doritos, was up 5 percent in the quarter.
Overall, revenue in the latest quarter was $16.1 billion, slightly ahead of estimates.