PepsiCo has announced a 20 per cent decline in first-quarter net income despite strong sales gains during the period.

For the quarter ended 19 March, the company reported earnings of US$1.14bn, or 71 cents a share, down from $1.43bn, or 89 cents a share, in the same period a year ago.

The snack giant said that the decline was the consequence of a higher net interest expense in 2011, primarily related to bottler acquisitions, and a higher core tax rate.

Sales gained 27 per cent in the three months, climbing to $11.94bn thanks to solid organic volume growth and the acquisition of Russian dairy group Wimm-Bill-Dann.