Pepsico Says Net Was Flat During 1st Quarter

Pepsico cited a loss related to the sale of its retail bakery division for first-quarter earnings, which were virtually unchanged.

But the company said earnings from continuing operations rose 17% as its soft drink, snack foods and restaurant divisions each turned in double-digit gains in operating income.

The beverage and food giant said its net income amounted to $68.9 million for the three months ended March 21. First-quarter revenue rose 34% to $2.29 billion.

The latest results reflect a $13-million loss related to the March 31 sale of Pepsico’s La Petite Boulangerie retail bakery division.

Soft drink earnings rose 32% as the division’s revenues rose 40%, the company said. It said its bottling group posted strong gains. The latest results also reflected contributions from MEI Corp., a franchise bottling operation purchased in May and Seven-Up International, acquired in July.

The Purchase, N.Y.-based firm said domestic volume sales of Pepsi-Cola brands grew 5%, reflecting continuing double-digit increases for Diet Pepsi and increased distribution of Slice juice-added soft drinks.

International sales rose 28%, but foreign earnings slipped because of increased promotional expenses in certain countries.

Snack food earnings rose 41% on a 6% sales gain, the company said. It said the increases stemmed from continued increases in sales of Frito-Lay’s major brands, cost controls and lower new product spending.

Restaurant earnings rose 48% as sales jumped 67%, reflecting the October, 1986, acquisition of Kentucky Fried Chicken and a 3% increase in average sales per restaurant.