PepsiCo Q3 Results Top Estimates; Reinstates Core EPS Outlook Above EstimatesOctober 8, 2020
Snack and beverage giant PepsiCo Inc. (PEP) on Thursday reported an increase in net income for the third quarter, reflecting revenue growth on continued strength in its global snacks and food business and improvement in its global beverage business.
Both core earnings per share and net revenues for the quarter beat analysts’ estimates. The company also reinstated its core earnings guidance for the full-year 2020, well above estimates.
“Despite the ongoing volatility and complexity in our operating environment, I believe our third quarter performance reinforces the diversification of our portfolio…,” said Chairman and CEO Ramon Laguarta.
For the third quarter, net income attributable to the company grew to $2.29 billion or $1.65 per share from $2.10 billion or $1.49 per share in the year-ago quarter.
Core earnings for the quarter were $1.66 per share, compared to $1.56 per share in the year-ago quarter. On average, 16 analysts polled by Thomson Reuters expected the company to earn $1.49 per share for the quarter.
Net revenue for the quarter grew 5.3 percent to $18.09 billion from $17.19 billion last year. Analysts expected revenues of $17.23 billion. Organic revenue growth for the quarter was 4.2 percent.
In the quarter, Frito-Lay North America, Quaker Foods North America, PepsiCo Beverages North America, Europe, Africa, Middle East and South Asia as well as Asia Pacific, Australia and New Zealand and China reported higher revenues. Revenues in Latin America declined.
“As the environment continues to evolve, we remain committed to executing on our strategy to become Faster, Stronger and Better and win in the marketplace,” Laguarta added.
Looking ahead to fiscal 2020, PepsiCo reinstated its guidance and now projects core earnings per share of about $5.50 on organic revenue growth of about 4 percent. The Street expects earnings of $5.36 per share for the year.
The company had withdrawn its financial guidance for the full-year 2020 in late April and did not provide a financial outlook for fiscal year 2020 in mid-July, while reporting second-quarter results.
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