US snack and cola maker PepsiCo has booked a 21% decline in second-quarter net profit.
In an earnings update today (25 July), the company said net profit totalled US$1.49bn in the 12 weeks to 16 June, down from $1.89bn in the previous year.
The bottom line was hit by one-off items, including acquisition related charges.
However, operating income declined 14% and core operating profit was down 5%, "in line" with management expectations.
Currency exchange and "previously announced structural changes" - primarily beverage refranchisings in China and Mexico - weighed on sales, which dipped 2% in the period. Excluding these impacts, sales would have gained 5%, the company emphasised.
The fall in second-quarter profits contributed to lower first-half earnings. Sales inched up in the first half of 2012, reaching $28.89bn, compared to $28.76bn a year earlier.
Commenting on the results, CEO Indra Nooyi said the group was "diligently executing" its strategy to cut costs from the business while also increasing its brand building activities.
"Our focus for the second half of the year is squarely on executing against our strategic priorities. We will continue to step up our brand support through increased advertising and marketing, accelerate our innovation to drive growth, and drive our aggressive productivity agenda," Nooyi said.
