NEW YORK: PepsiCo. Inc. has reported a better-than-expected profit for the second quarter, buoyed by lower raw material costs and higher demand for Frito-Lay snacks and new beverages in North America.
PepsiCo’s shares rose 1.3 percent to $107.35 in premarket trading, setting up shares of the maker of Pepsi, Gatorade and Tropicana to scale a record high in regular trading. Pepsi also boosted its forecast for adjusted profit for the year.
New drinks such as Propel flavored water and Naked Cold Pressed juice, Smartfood Popcorn and snacks under its “Simply” brand helped drive sales, the company said.
PepsiCo. and other food companies are spending more to develop new products to meet the changing tastes of consumers who are increasingly seeking healthier drink and snack options.
“The North American strength is a big driver behind raising guidance for the year because North America really is performing strongly right now,” Hugh Johnston, PepsiCo’s chief financial officer told Reuters.
Pepsi has doubled its research and development spending over the last 5 years and new products now account for 9 percent of PepsiCo’s revenue, up from 5 percent in past years, Johnston said.
PepsiCo’s cost of sales fell 6 percent in the three months ended June 11.
That helped net income attributable to PepsiCo. increase 1.3 percent to $2.01 billion, or $1.38 a share.
Excluding items, the company earned $1.35 per share, beating the average analyst estimate of $1.30, according to Thomson Reuters I/B/E/S.
Net revenue fell 3.3 percent to $15.395 billion, but inched past the average analyst estimate of $15.37 billion.
Net revenue in the North America Beverages unit, PepsiCo’s biggest business, rose 1 percent — the slowest growth since the company started breaking out beverage sales from the region a year ago.
Revenue from the Frito-Lay business, which includes Doritos, Lay’s and the Simply line of snacks, rose 3 percent. New snacks launched under the Simply brand included Simply Tostitos black bean chips and organic chunky medium salsa.
PepsiCo. said it now expects 2016 adjusted earnings of $4.71 per share, up from its previous forecast of $4.66 per share.
PepsiCo earnings beat expectations
PepsiCo earnings beat expectations
Qatar wealth fund plans to invest in 5 new VC funds
DOHA: Qatar Investment Authority plans to invest in five new venture capital funds as part of an expanded $3 billion venture capital program, the sovereign wealth fund said on Monday.
The new funds, called Greycroft, Ion Pacific, Liberty City Ventures, Shorooq and Speedinvest, are set to open offices in Doha in an effort to develop Qatar as a venture capital hub, it said in a statement.
The “Fund of Funds” initiative was unveiled in 2024 to attract venture capital firms to Qatar, build a robust environment for entrepreneurs and help diversify its economy away from fossil fuel revenues, as the country follows the path of other wealthy Gulf peers.
Qatar’s prime minister on Sunday announced an expansion of the fund to reach up to $3 billion.
“This year, we move from momentum to scale,” Sheikh Mohammed bin Abdulrahman Al-Thani said as he opened the Qatar edition of the Web Summit technology conference.
The expansion would potentially target investments besides series A and B funding rounds.
“We are now expanding the scope to do later rounds, so that may open up conversations with a different set of managers,” said Mohsin Pirzada, the head of funds at QIA, in an interview with Reuters.
“We will continue to be quite flexible and support earlier stages as well, but there are sufficient pools of capital within the country to go after those types of opportunities,” he said, citing credit lending facilities.
The QIA has assets under management worth $580 billion, according to Global SWF, a sovereign wealth fund tracker, and late last year it launched its own AI-focused company Qai as it bets on the booming sector to drive economic diversification.
As part of its efforts, the country has launched a pilot computing credit program that provides free computing for startups that are based in Doha, which could be applicable to managers that are part of the Fund of Funds scheme.
The pilot program is going to be “a big differentiator in terms of what our program is offering vis-a-vis our peers in the region,” Pirzada said.
