PepsiCo Inc (NYSE: PEP) reported a higher-than expected quarterly profit thanks to cost-cutting and higher demand for more healthy drinks and snacks in North America.
PepsiCo and others in the industry are actively investing in the development of new products to meet the changing tastes of consumers, who are increasingly opting for healthy foods.
The net revenue of the division that produces beverages in North America - the largest PepsiCo business - increased by 8% in the fourth quarter ended December 31. The volume of unit sales rose 1%.
However, quarterly net profit attributable to shareholders of the company declined to $ 1.40 billion, or 97 cents per share, from $ 1.72 billion, or $ 1.17 per share, a year earlier.
The profit decline was due to pension contributions and expenditures to repay debt in the fourth quarter, as well as tax benefits for the period of the previous year, the company said.
Excluding the number of balance sheet items, PepsiCo earned $ 1.20 per share.
Net revenue rose 5% to $ 19.52 billion.
Analysts polled by Reuters, on average, expected earnings of $ 1.16 per share and revenue of $ 19.51 billion.
PepsiCo expects adjusted earnings in 2017 of $ 5.09 per share, while analysts expect $ 5.16.
Based in New York, the company said it expects organic revenue growth of at least 3% compared with 3.7% growth in 2016.
As for the US stock market as a whole, it has reached record highs for the fifth consecutive day as the country's president, Donald Trump, reiterated his promise to lower taxes. Also, the stock rose due to optimistic economic data that increased the likelihood of a rate hike.
Dow Jones index rose 0.39% to 20,584.3 points, S & P 500 rose 0.21 % to 2,342.65 points, and Nasdaq Composite index gained 0.2% to 5,794.23 points.