PepsiCo released its second quarter results today, which, like Coca - Cola's before them, show that the soft-drinks market is losing its fizz.
Luckily for Pepsi it also has a variety of snack food brands under its umbrella, including Quaker Oats and Doritos. The snack food division outperformed beverage operations and helped boost revenue growth to five percent for the quarter, up three percentage points from the first three months of 2014.
This performance was not enough to prevent the continued weakness of the soft-drinks market from dragging profits down. Earnings per share (EPS) fell from $1.29 in the last quarter to $1.28 this, with profits falling to $1.97bn from $2bn.
Despite what appeared to be bad news for the US company, the results beat market expectations and Pepsi's share price was up two per cent in pre-market trading. The company has also revised up its EPS expectations, from seven to eight per cent.
Like Coca - Cola, Pepsi has underperformed when compared to the market over the last year.
However, more recently Pepsi shares have done better, and the year-to-date figures show stocks have risen 7.5 per cent in 2014, just above the S&P 500 (7.32) and well above Coca - Cola (-0.28 per cent).
The US soft-drink market has taken a buffeting recently as consumers have become more self-conscious, eschewing fizzy drinks.
Chairman and chief executive of PepsiCo, Indra Nooyi, said:
"Despite operating in what continues to be a challenging and volatile macro environment, we are delivering consistent, strong results,"
"Our results reflect the power of our portfolio of products and brands, and the strength of our geographic footprint. They also reflect the hard work we've done to position our business for sustainable success.
"Based on the strength of our year-to-date results and our outlook for the remainder of the year, we're increasing our full-year, core constant currency EPS growth target to eight percent."