PepsiCo Lifts FY22 View As Q3 Results Top Estimates

Snack and beverage giant PepsiCo Inc. on Wednesday lifted its fiscal 2022 core earnings per share forecast above market estimates, as well as organic revenue growth view after reporting higher third-quarter results. Both earnings and top line beat Wall Street view.

In pre-market activity on Nasdaq, Pepsi shares were gaining around 2.7 percent to trade at $166.96.

Looking ahead for fiscal 2022, the company now expects to deliver 12 percent organic revenue growth, higher than previously expected 10 percent growth.

The company now projects 10 percent core constant currency earnings per share growth, up from earlier expected 8 percent.

The revised outlook imply 2022 core earnings per share of approximately $6.73, a 7.5 percent increase compared to 2021 core earnings per share of $6.26. The previous forecast was $6.63, a 6 percent growth from last year.

On average, analysts polled by Thomson Reuters expect earnings of $6.69 per share for the year. Analysts’ estimates typically exclude special items.

In the third quarter, net income attributable to Pepsi grew to $2.70 billion from last year’s $2.22 billion.

Earnings per share were $1.95, up 22 percent from last year’s $1.60. Core earnings per share were $1.97, compared to $1.79 last year. Analysts expected earnings of $1.84 per share for the quarter.

Net revenue improved 8.8 percent to $21.97 billion from $20.19 billion a year ago with growth in all segments and regions. Analysts were looking for revenues of $20.84 billion.

Organic revenue growth was 16 percent. In the quarter, convenient foods volume dropped 1.5 percent, while Beverages volume grew 3 percent.

Among segments, Frito-Lay North America recorded 20 percent revenue growth despite 2 percent drop in volume. The increase in Quaker Foods North America revenue was 15 percent, even as volume dropped 4 percent.

PepsiCo Beverages North America generated 4 percent higher revenues with 1 percent growth in volume.

In other regions, Latin America’s revenue grew 20 percent with higher volumes, and Europe revenues edged up 1 percent despite weak volume in both convenient foods and beverages.

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