PepsiCo, Inc. (PEP) 4Q Results Reflect Its Strength In Integrated Food

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PepsiCo, Inc. (NYSE:PEP) disclosed that its fourth quarter financial numbers reflected its strength in integrated food, as well as, beverage product portfolio. This apart, its worldwide footprint along with innovation with exceptional marketplace implementation helped to post strong earnings for the December quarter. The company claimed its results reflected exceeding of its full year targets.

As a result, PepsiCo, Inc. (NYSE:PEP)’s earnings and revenue came in more than what the Street analysts’ predicted. The market has greeted the results by lifting its stock price higher in pre-market trading activities. The company is also intending to give back about $8.5 – $9 billion to its shareholders by way of dividend and share buyback in the current year.

4Q Results

The company reported net income of $1.31 billion, down 25% from $1.74 billion, and earnings fell 23% to 87 cents a share from $1.12 a share in the year-ago quarter. On an adjusted basis, earnings would have been $1.12 a share for the fourth quarter, which was four cents a share higher than the Street estimations of $1.08 a share.

PepsiCo, Inc. (NYSE:PEP)’s net revenues slipped 1% to $19.95 billion from $20.12 billion in the previous year quarter. Revenue was also higher than the Street analysts’ predictions of $19.66 billion. The company stated that its organic revenue achieved 5% growth. Its core gross and operating margin witnessed 70 basis points and 15 basis points expansion respectively to reflect its tactics and initiatives. Its cash and cash equivalents were $6.13 billion at the end of the year.

Full Year Results

The company’s net income fell 3% to $6.5 billion from $6.7 billion, and earnings dipped 1% to $4.27 a share from $4.32 a share in 2013. Net revenues for the year were $66.68 billion, which was flat with the previous year period.

Guidance

Moving ahead, PepsiCo, Inc. (NYSE:PEP) expects to achieve 7% improvement in core earnings of $4.63 a share achieved in 2014. This meant that it would be able to deliver earnings of around $4.95 a share, which was higher than the Street predictions of $4.75 a share. It would also lift is dividend rate by 7.3% to $2.81 a share in the current year. The beverage firm expects to deliver organic revenue growth of mid-single digits over 2014.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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