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PepsiCo CFO: Food And Beverage Business Integration Puts Us At Top-Tier

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PepsiCo, Inc. (NYSE: PEP) came out with better than expected fourth-quarter earnings today and also increased its annual dividend by 7.3 percent. PepsiCo CFO Hugh Johnson was on CNBC after the results to break down the numbers and discuss the growth of the company’s beverage business.

Great Momentum

“It was a terrific quarter for us and, really, coming off of a terrific 2014,” Johnson said.

“Three big messages here. Number one: PepsiCo is delivering. You see that in numbers both in the quarter and in the year as we raised guidance over the course of the year.

“Behind that though, is PepsiCo really does have a lot of momentum both in terms of our large customers and our small customers.

“And the business is performing really well right now.”

Sales Growth: Billions Dollars

He continued, “One interesting fact in that regard, we generated in the U.S. about a billion dollars of sales growth for our customers. It took the next 27 customers to get to the next billion of growth, and that’s why Wal-Mart named us 'Supplier Of The Year' in large format and in small format.

“The biggest customer, 7-Eleven, also named us 'Supplier Of The Year.' So, we really do have great momentum. And perhaps most compellingly for investors, we are doing it the right way. Our innovation is terrific.”

Is Frito-Lay Responsible For The Rise In Numbers?

In responding to the supposition that investors are concerned that Frito-Lay and not the beverages was bolstering PepsiCo's numbers, Johnson responded that it was the relationship between the food and beverage business.

Related Link: UPDATE: PepsiCo Tops Q4 Expectations

“Overall, beverages are doing really well right now, not just in North America, but around the globe,” Johnson replied.

“If you look at the performance of North America Beverage in the quarter: 3 percent revenue growth; 11 percent operating profit growth.

“It seems to me that business is performing quite well right now, really at an industry leading level – importantly, both in the U.S. and internationally.

“It’s the integration of food and beverage portfolio that’s allowing us to really play at the top-tier.”

 

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