Shares of PepsiCo (PEP) are down 81 cents, or 1.2%, at $65.18 after the company this morning reported Q1 revenue of $9.37 billion, $200 million less than analysts expected, although EPS came in at 89 cents, 14 cents above estimates.
For this year, the company projects earnings per share growth of 11% to 13%, which would come out to $4.12 to $4.19, which is slightly below the average $4.17 estimate at the midpoint.
Q1 revenue rose 13%, but costs rose faster on a reported basis, when including the hit from the company’s acquisition of its bottlers, with gross cost of goods up 19% and selling, general and administrative costs up 39%, leading to a nearly 50% decline in operating profit to $840 million.
Foreign exchange boosted earnings growth to 23%; it would have been just 8% on a constant currency basis.
The Frito Lay division of the foods operation saw volume rise 1%, offsetting a 4% decline volume for the company’s North American beverage business. Volume in Europe was off 4%, while it jumped 13% in all other parts of the world.
Despite the drop in volume in North America, the company was able to drive a 32% increase in revenue on a constant currency basis.
PepsiCo purchased $940 million of its stock in Q1, it said, and expects to purchase $4.4 billion in total through 2010.
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