PepsiCo (PEP) earnings Q4 2019 beat estimates

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PepsiCo on Thursday reported quarterly earnings and revenue that topped analysts’ expectations after strong performances by its North American beverage and snack divisions.

But investors focused on the company’s weaker-than-expected forecast for 2020, and shares rose less than 1% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $1.45, adjusted, vs. $1.44 expected
  • Revenue: $20.64 billion, vs. $20.27 billion expected

In 2020, Pepsi expects 4% organic revenue growth and 7% earnings per share growth after stripping out currency fluctuations. The company is forecasting adjusted earnings per share of $5.88 for the year, falling short of analysts’ forecast of $5.95. The beverage and snack giant cited foreign currency as an expected headwind for 2020.

The company, whose products include Frito snacks, reported fiscal fourth-quarter net income of $1.77 billion, or $1.26 per share, down from $6.85 billion, or $4.83 per share, a year earlier.

Excluding items, Pepsi earned $1.45 per share, topping the $1.44 per share expected by analysts surveyed by Refinitiv.

Net sales rose nearly 6% to $20.64 billion, beating expectations of $20.27 billion. Organic revenue rose 4.3% during the quarter.

Frito-Lay and Pepsi’s North American beverage unit both reported organic sales growth of 3%. Frito-Lay’s volumes increased by 2% in the quarter. Organic sales for Quaker Foods North America, which includes Aunt Jemima syrup and Life cereal, were unchanged from a year earlier.

To drive organic sales, Pepsi has been spending more on advertising and marketing, giving a boost to legacy brands like Gatorade and newer portfolio additions like Bubly. The company is also trying to grow its e-commerce business, which accounted for nearly $2 billion in retail sales in 2019, falling just short of its target.

Pepsi also said it would increase its dividend by 7% to $4.09 per share from $3.82 per share. The change will go into effect in June.

Read the full press release here.

Correction: PepsiCo reported revenue of $20.64 billion. An earlier version of this story misstated the number.


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