Pepsi (PEP, $168.58) beats Q4 earnings expectations; but full-year guidance is below analysts' projection
PepsiCo reported its fourth quarter earnings that topped analysts’ expectations. Revenue, too beat Street estimates. However, the beverage behemoth’s projection on the full-year performance fell short of analysts’ forecasts.
The company’s adjusted earnings came in at $1.53 a share, compared to $1.52 expected by analysts polled by Refinitiv.
Revenue of $25.25 billion also beat $24.24 billion expected.
The company’s organic revenue, which excludes acquisitions and divestitures, climbed +11.9% in the quarter.
Pepsi’s North American beverage division’s organic revenue grew +12%, as it ventured into developing new products like an energy drink with Starbucks.
Frito-Lay organic revenue rose by 13% for the quarter.
Quaker Foods North America’s organic revenue climbed +9%.
Latin America experienced the biggest quarterly jump in organic revenue, at +17%. Mexico, Brazil, Turkey, Spain, India, Egypt, China and Thailand had double-digit growth in the quarter.
In an interview with CNBC, Pepsi’s chief financial officer, Hugh Johnston, mentioned cost challenges, but said the company has the brand loyalty and pricing power to “get through the year with our margins pretty well intact.” Johnston added on an earnings call that he expects the company would increase prices again.
Pepsi predicts organic revenue growth of 6% for the full-year 2022. The company expects fiscal 2022 core constant currency earnings of $6.67 per share lower than analysts’ projections of $6.73.
The company expects to pay out around $7.7 billion to shareholders, including dividends of $6.2 billion and share buybacks of $1.5 billion, in the coming year.
