PepsiCo tops analysts’ estimates for earnings and revenue in the first quarter

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Apr 28, 2020
  • PepsiCo Inc. records £11.10 billion in revenue in Q1 and makes 86 pence of earnings per share.
  • The Frito-Lay owner suspends full-year financial guidance citing Coronavirus uncertainty.
  • The American multinational company sustains dividends and share buyback programme.

PepsiCo Inc. (NASDAQ: PEP) released its quarterly financial results on Tuesday that posted a 10% increase in its adjusted earnings in the first quarter as consumers stockpiled snacks and drinks to prepare for social distancing amidst the Coronavirus pandemic.

The company, however, suspended its full-year financial guidance on the rising uncertainty ascribed to the ongoing health crisis. PepsiCo said that the duration of the pandemic and the magnitude of its impact on business is currently difficult to predict with accuracy.

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Adjusting for currency fluctuations, the Frito-Lay owner had originally estimated a 4% organic growth in revenue and a 7% organic growth in its EPS (earnings per share) this year. PepsiCo was reported 1% up in premarket trading on Tuesday.

PepsiCo’s Q1 financial results versus analysts estimates

According to Refinitiv, analysts had forecast the company to print £10.57 billion in revenue in the first quarter. Their estimate for earnings per share was capped at 82 pence. In its financial report on Tuesday, however, PepsiCo boasted a higher quarterly revenue of £11.10 billion and also topped the estimate for earnings making 86 pence per share in the recent quarter.

At £1.07 billion, its net income in Q1 fell short of £1.13 billion in the comparable quarter last year. PepsiCo’s net sales, however, translated to a 7.7% year over year increase in the first quarter. The American multinational food and beverage company registered its organic revenue growth in Q1 at 7.9%.

In its announcement on Tuesday, PepsiCo also said that it plans on spending £4.40 billion on dividends this year and repurchase £1.60 billion worth of shares. The company also highlighted to have closed its Rockstar Energy acquisition of £3.08 billion. Following the acquisition, it signed a distribution agreement (exclusive) with the U.S-based Vital Pharmaceuticals that manufactures Bang energy drinks.

PepsiCo’s North American drinks business records a 6% growth

PepsiCo’s drinks business in North America printed a 6% growth in organic revenue in the recent quarter.

At £108 per share, PepsiCo is currently trading around the same level at which it opened in the stock market in January 2020. The stock, however, had dropped to as low as £83 per share last month. PepsiCo’s performance was reported fairly upbeat in 2019 with an annual gain of a little over 20%.

At the time of writing, the company is valued at £149.40 billion and has a price to earnings ratio of 25.89.

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