We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Pepsi (PEP) Tops Q1 Earnings, Revenues on Price Gains
Read MoreHide Full Article
PepsiCo, Inc. (PEP - Free Report) reported better-than-expected results in first-quarter 2017 (ending Mar 25), with both earnings and revenues beating the Zacks Consensus Estimate.
Positive price realization, cost cutting initiatives and healthier snacks helped the company to post better-than-expected results. This partly offset some challenging food and beverage industry trading conditions in North America accompanied by continued volatility in many developing and emerging markets.
Earnings
PepsiCo’s first-quarter core earnings per share (EPS) of 94 cents beat the Zacks Consensus Estimate of 91 cents by 3.3%.
Earnings grew 5.6% year over year despite adverse impact of currency headwinds on sales. Also, currency hurt earnings by 2%. In constant currency terms, adjusted earnings grew 7% on decent sales growth.
Notably, core earnings exclude restructuring and impairment charges and commodity mark-to-market net impact. Reported earnings came in at 91 cents per share, up 43% year over year, primarily reflecting the impact of the year-ago charge related to the transaction with Tingy.
Sales
Total sales improved 1.6% year over year to $12.05 billion. Foreign exchange (Fx) hurt revenue growth by 1%. Reported revenues surpassed the Zacks Consensus Estimate of $11.97 billion by 0.7%.
Excluding the impact of Fx, revenues increased 2.1% on an organic basis, primarily driven by higher demand for beverages/food/snacks in Latin America and Asia, and Europe Sub-Saharan Africa. However, organic sales growth was lower than the 3.7% rise recorded in the previous quarter.
Total volumes remained flat in the quarter versus 2% growth witnessed in the previous quarter. While organic snacks/food grew 1%, beverage volumes were even.
Quarterly Segment Details
Organic food/snacks volumes dropped 1.5% at the Frito-Lay segment, softer than 1% growth seen in the last quarter. Organic volumes decreased 1% at Quaker Foods, another American snacks business, against growth of 1% recorded in the previous quarter.
Organic snacks volumes rose 1% at the Latin America segment (softer than 4% growth in the previous quarter) and 7% in AMENA (softer than 8% growth in the last quarter). Organic snacks volumes rose 3.5% at the Europe Sub-Saharan Africa (ESSA) segment, a shade higher than the 3% growth last quarter.
Organic beverage volumes grew 3%, same as the previous quarter. However, it declined 3% in North America, 3% in Latin America and 1% in ESSA.
Cash and cash equivalents were $9,528 million as of Mar 25, 2017, up from $9,158 million as on Dec 26, 2016. Long-term debt was $30,081 million at the quarter end, up from $30,053 million as on Dec 26, 2016.
Net cash used for operating activities were $199 million in the quarter, against cash provided by operating activities of $305 million a year ago.
2017 Guidance
The company reaffirmed its core earnings guidance at $5.09 per share, compared with $4.85 reported in 2016. This implies 4.9% year-over-year growth.
Excluding headwinds from currency and structural changes, organic revenues are expected to rise 3%. Currency is projected to hurt revenues by 2%, while the 53rd week in 2016 is expected to hurt sales by 1%.
Also, management plans to return $6.5 billion to shareholders through dividends and share repurchases. Free cash flow is estimated at around $7 billion.
Dr Pepper Snapple Group Inc. reported first-quarter adjusted earnings per share of $1.01, beating the Zacks Consensus Estimate of 96 cents by 5.2%. Earnings also increased 7.4% year over year.
The Coca-Cola Company’s (KO - Free Report) first-quarter 2017 adjusted earnings were 43 cents per share, missing the Zacks Consensus Estimate of 43 cents by 2.3%.
Upcoming Peer Release
Monster Beverage Corp. (MNST - Free Report) is expected to report quarterly results on May 5.
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.
Image: Bigstock
Pepsi (PEP) Tops Q1 Earnings, Revenues on Price Gains
PepsiCo, Inc. (PEP - Free Report) reported better-than-expected results in first-quarter 2017 (ending Mar 25), with both earnings and revenues beating the Zacks Consensus Estimate.
Positive price realization, cost cutting initiatives and healthier snacks helped the company to post better-than-expected results. This partly offset some challenging food and beverage industry trading conditions in North America accompanied by continued volatility in many developing and emerging markets.
Earnings
PepsiCo’s first-quarter core earnings per share (EPS) of 94 cents beat the Zacks Consensus Estimate of 91 cents by 3.3%.
Earnings grew 5.6% year over year despite adverse impact of currency headwinds on sales. Also, currency hurt earnings by 2%. In constant currency terms, adjusted earnings grew 7% on decent sales growth.
Notably, core earnings exclude restructuring and impairment charges and commodity mark-to-market net impact. Reported earnings came in at 91 cents per share, up 43% year over year, primarily reflecting the impact of the year-ago charge related to the transaction with Tingy.
Sales
Total sales improved 1.6% year over year to $12.05 billion. Foreign exchange (Fx) hurt revenue growth by 1%. Reported revenues surpassed the Zacks Consensus Estimate of $11.97 billion by 0.7%.
Excluding the impact of Fx, revenues increased 2.1% on an organic basis, primarily driven by higher demand for beverages/food/snacks in Latin America and Asia, and Europe Sub-Saharan Africa. However, organic sales growth was lower than the 3.7% rise recorded in the previous quarter.
Total volumes remained flat in the quarter versus 2% growth witnessed in the previous quarter. While organic snacks/food grew 1%, beverage volumes were even.
Quarterly Segment Details
Organic food/snacks volumes dropped 1.5% at the Frito-Lay segment, softer than 1% growth seen in the last quarter. Organic volumes decreased 1% at Quaker Foods, another American snacks business, against growth of 1% recorded in the previous quarter.
Organic snacks volumes rose 1% at the Latin America segment (softer than 4% growth in the previous quarter) and 7% in AMENA (softer than 8% growth in the last quarter). Organic snacks volumes rose 3.5% at the Europe Sub-Saharan Africa (ESSA) segment, a shade higher than the 3% growth last quarter.
Organic beverage volumes grew 3%, same as the previous quarter. However, it declined 3% in North America, 3% in Latin America and 1% in ESSA.
Margins
Core gross margins contracted 45 basis points (bps). Core operating margin contracted 28 bps on lower gross margin gains.
Financials
Cash and cash equivalents were $9,528 million as of Mar 25, 2017, up from $9,158 million as on Dec 26, 2016. Long-term debt was $30,081 million at the quarter end, up from $30,053 million as on Dec 26, 2016.
Net cash used for operating activities were $199 million in the quarter, against cash provided by operating activities of $305 million a year ago.
2017 Guidance
The company reaffirmed its core earnings guidance at $5.09 per share, compared with $4.85 reported in 2016. This implies 4.9% year-over-year growth.
Excluding headwinds from currency and structural changes, organic revenues are expected to rise 3%. Currency is projected to hurt revenues by 2%, while the 53rd week in 2016 is expected to hurt sales by 1%.
Also, management plans to return $6.5 billion to shareholders through dividends and share repurchases. Free cash flow is estimated at around $7 billion.
The company currently holds a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
Dr Pepper Snapple Group Inc. reported first-quarter adjusted earnings per share of $1.01, beating the Zacks Consensus Estimate of 96 cents by 5.2%. Earnings also increased 7.4% year over year.
The Coca-Cola Company’s (KO - Free Report) first-quarter 2017 adjusted earnings were 43 cents per share, missing the Zacks Consensus Estimate of 43 cents by 2.3%.
Upcoming Peer Release
Monster Beverage Corp. (MNST - Free Report) is expected to report quarterly results on May 5.
Pepsico, Inc. Price, Consensus and EPS Surprise
Pepsico, Inc. Price, Consensus and EPS Surprise | Pepsico, Inc. Quote
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.
Click here for a peek at this private information >>