PepsiCo Q2 Profit Beats Estimates, Organic Revenue Up 2.6%; Reaffirms Targets

PepsiCo, Inc. (PEP) reported second-quarter core EPS of $1.61, an increase of 8 percent from a year ago. Excluding the impact of foreign exchange translation, core constant currency EPS increased 7 percent from the prior-year period. On average, 20 analysts polled by Thomson Reuters expected the company to report profit per share of $1.52 for the quarter. Analysts’ estimates typically exclude special items.

Second-quarter reported EPS was $1.28, a decrease of 13 percent from the second quarter of 2017. Foreign exchange translation positively contributed 1 percentage point to reported EPS performance. Net income attributable to PepsiCo was $1.82 billion compared to $2.11 billion, prior year.

Second-quarter reported net revenue increased 2.4 percent to $16.09 billion. Analysts expected revenue of $16.04 billion for the quarter. Organic revenue, which excludes the impacts of foreign exchange translation, structural and other changes, grew 2.6 percent.

“We are pleased with our results for the second quarter and we remain on track to achieve the financial targets we set out at the beginning of the year. The majority of our businesses performed very well, particularly our international divisions propelled by continued growth in developing and emerging markets, and our North America Beverages sector posted sequential net revenue and operating profit performance improvement,” said Chairman and CEO Indra Nooyi.

Consistent with its previous guidance for 2018, the company expects: full-year organic revenue growth to be at least in line with the 2017 growth rate of 2.3 percent. Based on current market consensus rates, foreign exchange translation is estimated to have a neutral impact on revenue and earnings per share. The company targets core earnings per share of $5.70, a 9 percent increase compared to 2017.

For 2018, total cash returns to shareholders is anticipated to be approximately $7 billion. Total dividends to shareholders are expected to be approximately $5 billion and share repurchases are expected to be approximately $2 billion.

by RTTNews Staff Writer

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