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Pepsi first-quarter profit drops 1%

AMERICAN beverage and snack maker PepsiCo Inc said yesterday first-quarter profit dropped 1 percent, hurt by the stronger dollar and continued weak demand for soft drinks in the United States, but results surpassed analyst expectations.

And Pepsi offered US$6 billion to buy out the remaining shares of its two largest bottlers, PepsiAmericas and Pepsi Bottling Group.

Profit for the quarter ended March 21 fell 1 percent to US$1.14 billion, or 72 cents per share, from US$1.15 billion, or 70 cents per share, a year ago. Analysts polled by Thomson Reuters, on average, expected a profit of 67 cents per share. Revenue slipped almost 1 percent to US$8.26 billion from US$8.33 billion last year. Analysts expected sales of US$8.28 billion. Excluding the stronger dollar's adverse affect on international results, net revenue grew 6 percent, the company said.

Net revenue at its snack division, Frito-Lay North America, rose 10 percent in the quarter as volume dropped 1 percent. It recently began to add 20 percent more product into its take-home bags of Doritos, Cheetos and other products without raising the price.


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