Snacks and beverage giant PepsiCo Inc. (PEP) reported weak second-quarter earnings on Tuesday. Core earnings and revenue, however, exceeded market estimates.
Looking ahead, the company now expects to generate 10% organic revenue growth for fiscal 2022, compared to a previous guidance of 8%. In addition, the company continues to expect an 8% increase in earnings per share in constant currencies.
In pre-market activity on the Nasdaq, Pepsico shares were up about 1%.
President and CEO Ramon Laguarta said, “…our Company momentum has continued despite continued macroeconomic and geopolitical volatility and higher levels of inflation in our markets… Our performance also gives us confidence that our investments to become an even faster, even more strong and even better by winning with pep+ work.”
For the second quarter, net income attributable to the company decreased to $1.43 billion from $2.36 billion a year ago.
Earnings per share were $1.03, down 39% from $1.70 a year earlier.
Basic net income was $2.58 billion or $1.86 per share, compared to $2.39 billion or $1.72 per share a year earlier.
On average, 18 analysts polled by Thomson Reuters had expected earnings of $1.74 per share for the quarter. Analyst estimates generally exclude special items.
Net revenue increased 5.2% to $20.23 billion from $19.22 billion last year. Organic revenue growth was 13%. Analysts estimated revenue at $19.51 billion for the quarter.
During the quarter, total Convenient Foods volume increased by 3% and Beverages by 6%.
Frito-Lay North America revenue increased 14% to $5.18 billion, despite a 2% decline in volume.
Quaker Foods North America sales increased 17% as reported and 18% organically, with volume growth of 2%.
PepsiCo Beverages North America revenue fell 1% to $6.12 billion on low volume, but grew 9% organically.
Latin America saw 23% revenue growth with higher volume. Revenue in Europe fell 8% on a reported basis with low volume, but grew 9% organically.
Africa, the Middle East and South Asia, as well as Asia-Pacific, Australia, New Zealand and China saw higher revenues and volumes.
PepsiCo shares settled at $170.47 on Monday, down 0.8%. In pre-market activity on the Nasdaq, shares gained 0.9% to trade at $172.
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