PepsiCo CFO on Q4 results: ‘we have a lot of pricing power’

PepsiCo Inc (NASDAQ: PEP) reported market-beating results for its fiscal fourth quarter on Thursday. The stock is still down about 1.0% as shareholders focused more on a half a billion dollars decline in net income.

What the earnings report tells us

PepsiCo said its net income printed at $1.32 billion that translates to 95 cents per share. In comparison, it had posted a much higher $1.85 billion in net income or $1.33 per share. Adjusted for one-time items, its core EPS came in at $1.53.

At $25.25 billion, the beverage giant noted a 12.4% annualised growth in revenue, as per the earnings press release. According to FactSet, experts had forecast $1.52 of adjusted EPS on $24.24 billion in revenue.

In North America, revenue was up 13% at Frito-Lay, 9.0% at Quaker Foods, and 13% at PepsiCo Beverages. On CNBC’s “Squawk Box”, CFO Hugh Johnston said:

Guidance for fiscal 2022

For the full financial 2022, PepsiCo forecasts an increase of 8.0% in its core EPS versus analysts at 7.5%. Its estimate for 6.0% YoY growth in organic revenue was also ahead of the FactSet consensus of 5.4%.

The American multinational lifted its annual dividend from $4.30 per share to $4.60 per share and launched a new $10 billion share buyback programme on Thursday. The finance chief added:

Johnston forecasts commodity inflation to keep above 10% this year.