PepsiCo, Inc. (NYSE:PEP) released its Q2 earnings which showed a 6% year-over-year growth in its EPS and a 2% increase in total revenue. With operations around the world the company is impacted by fluctuations in foreign exchange which this quarter had a negative impact on overall EPS.
Operating profit saw a minimal change of just 1%, however YTD year-over-year numbers show an improvement of 7%. This is mainly due to the increase in sales as well as a 2% YTD year-over-year drop in selling general and administrative expenses.
PepsiCo’s cash from operations was $2.2 billion this quarter, down 27% from $3.1 billion in 2016. This drop in cash flow was primarily due to changes in working capital.
In North America, PepsiCo saw sales growth of its Frito-Lay brand of 3% and its beverages segment improved by 2%. However, Quaker Foods saw a drop of 1% and YTD is now at 2% behind last year’s totals. Quaker is also the smallest segment, so the YTD drop in sales amounts to less than $200 million.
Geographically, the biggest area of concern for the company is in its Asia, Middle East, and North Africa segment which saw an 8% decline this quarter and YTD is down 9%. Operating profit for the region was also down 19% for the quarter but YTD is still up over 104% thanks to a much stronger first quarter. In other areas, Europe and Latin America both saw increases of 6% each.
The company expects revenue to grow at a rate of 3% in 2017.
