PepsiCo (NASDAQ: PEP) reported second-quarter earnings on Tuesday that beat analysts' expectations, boosted by the continued strength of its Frito Lay snack business.
The company's snack business, which includes brands like Doritos and Tostitos, grew 4%. Its North American beverage business, which includes brands like Gatorade and its namesake cola, dropped 1%, still an improvement over previous quarters.
Earnings came in at $1.61 per share vs. $1.52 per share forecast by Thomson Reuters. Revenues were $16.09 billion vs. $16.04 billion forecast. For the quarter, Pepsi's net income dropped to $1.82 billion, or $1.28 a share, from $2.11 billion, or $1.46 a share, a year ago.
Pepsi's North American beverage business has been struggling to contend with increased competition from upstart brands and changing consumer tastes. CEO Indra Nooyi last quarter placed the blame for slowing sales on Coca-Cola's (NYSE: KO) increased spending on advertising, though she did not address the Atlanta-based beverage giant by name.
She said Pepsi would respond by increasing spending on its trademark cola brand and improving brand communications.
Pepsi's Frito-Lay snack business, meantime, continues to thrive. Pepsi in May announced its acquisition of baked fruit and vegetable company Bare Foods as part of its efforts to keep its business on trend with today's snackers.
PepsiCo shares opened Tuesday up $2.47, or 2.3%, to $110.23, within a 52-week trading range of $95.94 to $122.51.
