PepsiCo 1Q Profit Rises 16 Percent

A Pepsi Cola vending machine is seen at the Sacamento Convention Center in Sacramento, Calif., Wednesday, April 25, 2007. PepsiCo Inc., the world's second-largest soft drink maker, said Wednesday its first-quarter profit rose 16 percent on the strength of its international and Frito-Lay snacks divisions. (AP Photo/Rich Pedroncelli) (Rich Pedroncelli - AP)

NEW YORK -- PepsiCo Inc., the world's second-largest soft drink maker, said Wednesday its first-quarter profit rose 16 percent on the strength of its international and Frito-Lay snacks divisions.

Chief Executive Indra Nooyi said the company had a "rich acquisition pipeline" and that investors could expect the company to do deals worth as little as $5 million to $10 million and as much as $2 billion.

PepsiCo has recently made acquisitions to diversify its holdings of snacks and non-cola drinks seen as healthier alternatives.

Profit for the quarter ending March 24 was $1.1 billion, or 65 cents per share, up from $947 million, or 56 cents per share, a year earlier.

Revenue rose 9 percent to $7.35 billion from $6.72 billion last year.

Analysts polled by Thomson Financial had predicted earnings of 61 cents per share on revenue of $7.18 billion. Consensus estimates usually exclude one-time items.

The company reaffirmed that it expects full-year earnings per share of $3.30. Analysts project $3.32 for yearly earnings per share.

PepsiCo's shares rose 55 cents to close at $66.96 on the New York Stock Exchange, where they briefly rose to a 52-week high of $67.24.

In addition to Frito-Lay and Pepsi beverages, PepsiCo owns the Gatorade sports drinks, Tropicana juices and Quaker foods businesses. It has also recently bought Izze Beverage Co., Naked Juice Co. and Bluebird Foods.

It is the second biggest soft drink company after The Coca-Cola Co., based in Atlanta.

"(PepsiCo) International was the star from a top and bottom line perspective," Morgan Stanley analyst William Pecoriello said in a note to investors, adding that the company had a strong quarter with quality results.

Both PepsiCo International and Frito-Lay North America saw revenue climb while also growing their operating margins, the company said. The international drinks unit had a 29 percent jump in profit on a 19 percent increase in revenue. Frito-Lay's profit and revenue both grew by 7 percent, with strong results from sales of Doritos, SunChips and Tostitos.