PepsiCo’s net profit increased by 35%, in the second quarter, from $1.49 billion, or 94 cents a share, a year ago to $2.01 billion, or $1.28 a share, supported by improving food segment revenues in the Americas region, according to MarketWatch. The profit, excluding some items, was $1.31 a share. Global snack sales were up 3 percent, while drink sales worldwide rose 1.5 percent.
The group reiterated its profit estimates on base operations this year, but anticipates that currency exchange rates will have a 2% negative impact on the results. In April, PepsiCo estimated this impact will be only 1%.
Revenues of the food and beverage corporation rose by 2.1% to $16.81 billion, close to the analysts’ estimates. Food segment revenues in the Americas region rose by 5.2% to $6.03 billion, while the beverage segment revenue decreased by 1.7% to $5.26 billion.
According to Bloomberg, the results could help Chief Executive Officer Indra Nooyi to reject pressure from investor Nelson Peltz, from Triana Fund Management, to acquire Mondelez International (formerly Kraft Foods) or to separate the production of foods from the drinks production, in order to increase shareholder profits.
Peltz said last week in New York that PepsiCo should buy Mondelez at a price of 35-38 dollars per share in a deal valued at up to $67.8 billion. Last year, PepsiCo increased its beverage market share and maintained a dominance on the snacks in the U.S.
“The risk of an $80 billion transaction and then trying to drive a lot of synergies out of that, taking on all the integration risks, we just don’t think it makes sense for PepsiCo shareholders,” said Hugh Johnson, Pepsico Chief Financial Officer.
Shares of Mondelez (NASDAQ:MDLZ) were around $30 today, giving the company a market capitalization of $55 billion.
Shares of PepsiCo (NYSE:PEP), the largest snack maker in the world and second-largest soft drink maker were at $86.03 around 11 AM (EST), with a market capitalization of $133 billion.
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