PepsiCo revenue rises 6.8% despite unbalanced economic recovery outside of the U.S.

PepsiCo on Thursday reported quarterly earnings that topped analyst estimates even as the company saw uneven recoveries in its international markets.

It’s the company’s first quarter facing tough comparisons to early stockpiling. CEO Ramon Laguarta said Pepsi also dealt with weather-related business interruptions in the United States.

Shares of the company rose less than 1% in premarket trading.

Here’s what Pepsi reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $1.21 adjusted vs. $1.12 expected
• Revenue: $14.82 billion vs. $14.55 billion expected

Pepsi reported fiscal first-quarter net income of $1.71 billion, or $1.24 per share, up from $1.34 billion, or 96 cents per share, a year earlier.

Excluding items, the food and beverage giant earned $1.21 per share, beating the $1.12 per share expected by analysts surveyed by Refinitiv.

Net sales rose 6.8% to $14.82 billion, topping expectations of $14.55 billion. Organic revenue, which strips out the impact of foreign currency, acquisitions and divestitures, grew by 2.4% in the quarter as consumers maintained their Covid pandemic snacking habits.

Frito-Lay North America’s organic revenue jumped 3%. New products like Doritos 3D Crunch and Cheetos Crunch Pop Mix encouraged consumers to keep snacking. The segment’s profits, however, were hurt by February’s winter storms.

The North American beverage business reported organic revenue growth of 2%. The company saw double-digit revenue growth for its Bubly sparkling water and Starbucks ready-to-drink coffees. Laguarta also said that Rockstar Energy has returned to positive sales growth after the company revamped the brand earlier this year. Pepsi bought Rockstar in 2020 for $3.85 billion.

Quaker Foods North America’s organic revenue rose just 1% in the quarter. The segment has benefited the most from the at-home breakfast trend, which could disappear as more consumers return to their offices.

Outside of North America, results were mixed as some markets grappled with new virus outbreaks. Most of its international markets’ first quarter includes only January and February. Europe’s organic revenue was unchanged from the year prior, while Africa, Middle East and South Asia’s slipped 1%. Latin America’s organic revenue rose 3%, but the Asia-Pacific, Australia and New Zealand and China Region segment climbed a whopping 18%.

The company reiterated its 2021 forecast, which expects mid-single-digit organic revenue growth and high-single-digit constant currency earnings per share. Pepsi is predicting strong sales from its North American beverages unit as more consumers visit restaurants and movie theaters, but demand for Quaker Foods products will likely moderate. Executives told analysts on the conference call that Covid-19-related expenses tend to go away as cases fall.