PepsiCo encouraged by Q1 results

PURCHASE, N.Y. — PepsiCo reported a net revenue increase of 1% to $12,581 billion from $12,428 billion for the period ended March 23. Its net income declined by slightly more than 1 billion to $1,085 billion from $1,133 billion.

However, on a constant currency basis, revenue increased 4%.

"We're greatly encouraged by the strong start to 2013. We delivered solid organic revenue growth and double-digit core EPS growth in the first quarter, driven by our balanced food and beverage product and global geographic portfolio. Our investments in creating this portfolio are paying off and our brand and innovation strategies are driving sustainable top-line growth," said chairman and CEO Indra Nooyi.

The company said revenue growth was driven by balanced volume growth and effective net pricing. Structural changes, primarily refranchising in China, negatively impacted reported net revenue performance by 3% points and foreign exchange translation had a 0.5-%-point unfavorable impact in the quarter.

"Importantly, we're laser focused on ramping up the effectiveness and efficiency of every aspect of our operating system, from procurement to manufacturing to selling and distribution. For the full year 2013, we expect to deliver approximately $900 million in productivity savings as part of our three-year, $3 billion productivity program, which will fund future growth investments and further enhance our operating margins. And, we've already begun to identify the next tranche of productivity savings to extend beyond our current program. We are squarely on track to deliver on our financial commitments for 2013, and remain committed to acting with urgency and intensity to create long-term value for our shareholders," added Nooyi.

PepsiCo Americas Foods revenue on a constant currency basis grew 6% in the quarter driven by revenue growth in all divisions, including Frito-Lay North America, Quaker Foods North America and Latin America Foods. Reported net revenue increased 5% in the quarter.