PepsiCo tops estimates on growth in developing markets

(Reuters) - PepsiCo Inc's. quarterly revenue and profit beat Wall Street's targets on Thursday as it sold more beverages and snacks in developing markets and posted a smaller sales decline in its North America beverages unit.

Sales in the beverage unit, which also makes Lipton tea and Mountain Dew, fell 1 percent, but were still an improvement over the past two quarters when they decreased at least 3 percent.

Pepsi and rival Coca-Cola are adding teas and coffees to their offerings and launching low and no-calorie versions of their marquee sodas to counter a switch to healthier drinks by consumers.

"Although we continued to face challenges in North America Beverages, the sector had sequential improvement in top line momentum since the fourth quarter of 2017," Chief Executive Officer Indra Nooyi said in a statement.

Pepsi is also concentrating on its other big business - snacking - by innovating with new flavors and packaging designs.

Sales at Pepsi's Frito-Lay division, its biggest unit that makes Lay's potato chips and Doritos tortilla chips, rose 3.4 percent in the first quarter.

The company said its snacks unit had strong performance with a 3 percent organic revenue growth. Organic revenue excludes benefits from divestitures and acquisitions.

PepsiCo's net income rose to $1.34 billion, or 94 cents per share, in the first quarter ended March 24, from $1.32 billion, or 91 cents per share, a year earlier.

Excluding items, Pepsi earned 96 cents per share, beating analysts' average estimate by 3 cents, according to Thomson Reuters I/B/E/S

Total revenue rose 4.3 percent to $12.56 billion, topping analysts' estimate of $12.40 billion.

Sales in Latin America, Europe and Sub Saharan Africa rose 14 percent and 15 percent, respectively. Sales in Asia, Middle East and North Africa rose 7 percent.

(Reporting by Nivedita Balu and Siddharth Cavale in Bengaluru; Editing by Sriraj Kalluvila)