PepsiCo profits down on lower beverage sales

PepsiCo has reported a 4.9% dip in third-quarter profits after the firm was hit by slower sales and unfavourable foreign exchange rates.

PepsiCo netted £1.9 billion or $1.21 a share in the quarter, down from $2 billion year-on-year.

Revenue was down 5.3% to $16.7 billion, primarily due to beverage refranchisings in China and Mexico and unfavourable foreign exchange rates. Operating margin was 16.8%, up from 16.5% during the same period last year.

A poll of analysts by Thomson Reuters had tipped the firm to deliver $1.16 a share on revenue of $16.9 billion.

PepsiCo's Americas Beverage unit reported a 3% dip in volume following the implementation of price rises and the firm still lags behind rival Coca-Cola in terms of market share. However, PepsiCo said that there had been no slowdown in its China business – in direct contrast to Coca-Cola who said on Tuesday that it expects market conditions in the country to be challenging over the coming months.

PepsiCo backed its full-year guidance, vowing to press on with a $600 million advertising campaign and launch new products such as the mid-calorie Pepsi Next in the US.

Meanwhile, PepsiCo’s worldwide snack division reported a 6% rise in revenue.