PepsiCo has reported a fall of 2% in net revenue for the second quarter (Q2) of 2012, as compared to the second quarter of 2011.

The drop was primarily due to structural changes and primarily refranchising in China and Mexico that negatively impacted net revenue by 4% points and due to negative foreign exchange translation that negatively impacted net revenue by 3% points.

Reported operating profit fell 14% and core operating profit declined 5%, as compared to second quarter of the previous year.

Net interest expense was $208m, an increase of $29m, compared to the prior year period, primarily due to lower interest income and higher debt balances.

PepsiCo chairman and CEO Indra Nooyi said the company is on the track to achieve its full-year targets, which it set at the start of the year.

"We were able to achieve significant pricing in the second quarter, reflecting the strength of our brand portfolio and the success of our packaging initiatives," Nooyi added.

"Our disciplined approach to pricing and continued focus on brand investment drove 5 percent organic net revenue growth and allowed us to substantially offset approximately $350 million in commodity cost inflation.

"Our focus for the second half of the year is squarely on executing against our strategic priorities.

"We will continue to step up our brand support through increased advertising and marketing, accelerate our innovation to drive growth, and drive our aggressive productivity agenda."

Image: PepsiCo’s portfolio of brands include Pepsi-Cola, Mountain Dew, Lay’s, Gatorade, Tropicana, 7Up, Doritos, Lipton Teas, Quaker Foods, Cheetos, Mirinda, Ruffles, Aquafina, Pepsi Max, Tostitos, Sierra Mist, Fritos and Walker’s. Photo: PepsiCo Inc.