This summary is based on the first quarter fiscal 2008 earnings call conducted by PepsiCo Inc. (PEP: chart) on April 24, 2008.

Management:

- Chairman & CEO: Indra Nooyi
- CEO of PepsiCo Americas Foods: John Compton
- CEO of PepsiCo Americas Beverages: Massimo D''Amore
- Vice Chairman and CEO of PepsiCo International: Mike White
- CFO: Richard Goodman
- VP of IR: Jane Nielsen

Key Investors Issues

- Revenues rose 13% to $8.3 billion.
- Earnings increased by 10% to $1.15 billion or 70 cents a share from $1.1 billion or 65 cents a share in the prior year.
- The firm also completed a joint venture with the Strauss Group to add Sabra fresh, refrigerated dips to the North American snacks portfolio.

First Quarter Highlights

Revenues were up 13% to $8.3 billion from $7.5 billion in the prior year due to volume growth.

- Earnings were $1.15 billion or 70 cents a share up 10% from $1.1 billion or 65 cents a share in the prior year despite a few points of deleverage below the line primarily as a result of mark-to-market accounting and a higher tax rate.
- The firm returned $2.1 billion to shareholders, $610 million in dividends and $1.5 billion in share repurchases.

- PepsiCo Americas Foods, which encompasses the food businesses across North America and Latin America generated 3% volume growth, 13% revenue growth and 8% operating profit growth, solid results in the face of considerable commodity headwinds.
- Frito-Lay North America, generated 2% volume growth, 7% revenue growth and 4% operating profit growth.
- The firm did see declines in the Quaker rice cakes business and a modest decline in trademark Doritos.

On the profit side, the 4% growth was about 3 points below the historical average because at Frito-Lay, the firm planned pricing four to five months ahead of in market timing.

- The company launched two new baked snacks, Lay’s Cracker Crisp and Cheetos Cracker Trax, both Smart Spot qualified and targeting incremental Cracker occasion.
- Pepsico completed the formation of the joint venture announced earlier with the Strauss Group, makers of the fast growing Sabra hummus and dips.
- Under the new JV, Frito-Lay and Strauss will each own 50% of the Sabra dip business, with Sabra expanding Frito-Lay’s role in providing healthier snack options and aligns with this fresh trend that is taking place in the market place.
- Quaker Foods division reported about flat volume for the first quarter but strong top line growth of 7%, with the top line driven by volume growth in Quaker Oats and ready-to-eat cereals.
- Net price realization and positive mix resulted in 7% revenue growth and helped offset commodity inflation.

- Latin America food businesses had an excellent quarter with each of the segments, Sabritas, Gamesa and South American Foods contributing to strong and balanced results.
- Latin American Foods reported growth was 8% volume, 37% revenue, and 27% profit growth.
- Sabritas delivered strong performance during the quarter, driven by an effective wait out and pricing actions coupled with successful promotions that delivered unit volume and revenue growth.
- Gamesa also posed a strong performance with high single digit volume growth and continued top line momentum especially in its high-end cookies and its expanding line of healthy Quaker cookies, bars, and snacks.

- South America contributed significantly to growth in the quarter, especially in the light of the capacity constraints in Brazil as a result of a fire in one of the major production facilities at the very end of last year.
- Brazil has been executing very successfully on its contingency plan which included SKU rationalization and leveraging the newly acquired Lucky production capability to its maximum level.
- The Brazil’s snack business will continue to benefit from the integration of the Lucky snack business and the launch of its new Twistos platform, which is a healthy bread snack.

- PepsiCo Americas Beverages volume growth decreased slightly versus prior year, however, every market contributed to the 6% revenue growth and total operating profit increased 7%.
- LRB declined almost 2 points in measured channels and the firm sees continued cash from the category with all channel growth for the full year probably only flat to up slightly.
- This impact reflects a significant slowdown in the unflavored water category which has helped to fuel overall category growth over the past several years and a softness in the food service in B&G channel.
- The Mountain Dew trademark continues to deliver growth and heading into the summer it is further strengthening the trademark with the distinctive Mountain Dew promotion.

Although it experienced new single-digits decline on brands Pepsi, it did begin to see the huge connection and engagement in consumers, via the Pepsi Stuff loyalty program and the continued growth of Diet Pepsi Max.

- Diet Pepsi Max’s growth has accelerated on the heels of the using successful communication campaign which peaked off during the Super Bowl.
- Gatorade grew almost 6% in quarter one and in line expansion, G2 and Tiger are performing very well in the market.
- G2 style progression is the cheapest the firm has ever achieved for the Gatorade innovation.

In the water category, unflavored based Aquafina declined neat single digit as the firm continued a rational approach to managing this lower margin segment which showed some aggressive pricing in the major channel.

- SoBe Life Water is generating strong consumer interest and enthusiasm, which has translated into triple digit growth and share gains.
- Lipton tea business continued to drive the non-carbs growth and build our leading share position in the ready-to-drink tea categories.
- The better capture new consumption occasions, the firm is continuing to add the new packaging to appeal to a broader range of consumers.
- On the energy front, the firm is focusing on the AMP brand, which grew more than 60% in the quarter and drove overall volume growth of 14% in the energy portfolio.

Pepsico recently introduced three new AMP flavors; each with specifically targeted energy benefit to meet the unique needs of energy consumers as being segment will use such occasions.

- The firm started national distribution of the premium Pure Valencia juice line and expect full distribution before Memorial Day.
- Naked Juice posted 10% volume growth and had an important food service week.