PepsiCo Inc announced that its revenue for the second quarter had increased, helped by snack and beverage volumes that were higher. At the same time, the company increased its guidance for earnings for the year.
Pepsi said it expects its core earnings per share growth to be 8%, up 1% from its guidance released previously.
Indra Nooyi CEO and Chairman said the increase in guidance was based upon the strength in its results year to date and its outlook for the rest of 2014.
Volumes in its snack and beverage sectors were up by 1%. The volume of carbonated soft drink was down 2% in the key market of North America, said Pepsi, a day after its biggest rival Coca-Cola said soda volumes had been flat in the same region during the second three months of 2014.
The results in the beverage sector had lagged behind that of snacks as consumers were drinking less soda.
PepsiCo pushed away the calls from the Management Fund of Nelson Peltz, an activist investor, which called for breaking up the beverage and snack businesses, saying the company is stronger with the two together.
At a conference of investors earlier in July, Peltz said he had spoken to over 100 investors of Pepsi and he did not rule out having a proxy fight.
Pepsi profit was posted at $1.98 billion, which was down from the $2.01 billion of last year during the second quarter. Earnings per share were higher this year compared to last by one penny to $1.29.
Excluding impairment and restructuring charges, earnings ended the quarter at $1.32 per share.
Revenue was up by 0.5% to end the quarter at $16.89 billion. Analysts had predicted earnings to be $1.23 per share on revenue of $16.82 billion.
Gross margin increased from 53% to 54% as costs of input dropped by 1.5% to $7.77 billion.
The foods business in the Americas posted revenue of $6.07 billion, while food sales in Latin America were flat and North America Quaker Foods sales dropped by 2.3%.
The Americas beverage sector for the company posted just a slight uptick in its revenue to end the quarter at $5.28 billion, while revenue in Europe was up slightly to reach $3.66 billion.
