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PepsiCo (PEP) earnings Q4 2019 beat estimates

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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