Pepsico Inc. Posts Sharp Turnaround

Pepsico Inc. said its second-quarter net income came to $256 million, compared to a loss of $42.5 million resulting from a restructuring in the same period a year earlier.

Revenue for the three-month period ended June 15 rose 7% to $1.94 billion from $1.82 billion, the company said.

The Purchase, N.Y.-based concern said it had strong operating earnings growth of 29% in both the second quarter and in the first half of the year.

For the six months, Pepsico said net income came to $319 million, compared to $4.61 million a year ago.

Half-year revenue increased 6% to $3.56 billion from $3.67 billion.

Interest expense and the company’s tax rate were lower in the half year, it said.

In the second quarter of last year, the company took a charge of $156 million to refranchise its overseas bottling operations and for the sale of its transportation division, said Keith Anderson, a spokesman for the company.

Total domestic and international soft-drink earnings rose 10% on a 3% revenue gain, the company said.

Pepsi-Cola grew substantially faster than the overall U.S. soft-drink market, the company said. Earnings were higher as bottler case sales rose 11% over a year earlier, it said.

Total snack food earnings grew 19% on a 7% increase in sales. Pepsico owns Frito-Lay, which recorded strong earnings gains and expanded profit margins, the company said.

Pizza Hut and Taco Bell continued to outperform the restaurant industry, with sales growth of 13%, it said. However, due to flat domestic performance and lower international results, total restaurant earnings fell 6%.

Pepsico recorded the sale of North American Van Lines to Norfolk Southern Corp. in the second quarter.

For detailed data and results of other companies, please see tables, Page 16.