Strong Earnings Propel Pepsi Stock Up 2%, Q2 Performance Outlook Revised Higher
PepsiCo (PEP) surged 2.1% in premarket trading on Thursday, outperforming market expectations by a wide margin for the second quarter. The renowned food and beverage company’s impressive performance sent its stock soaring.
PepsiCo delivered outstanding financial results, surpassing analyst projections on multiple fronts. The company reported adjusted earnings per share (EPS) of $2.09, exceeding expectations by an impressive 13 cents.
Moreover, PepsiCo’s revenue of $22.32 billion marked a remarkable year-over-year increase of over 10% and surpassed consensus estimates by nearly $600 million. These strong figures highlight PepsiCo’s continued growth and market dominance.
Despite facing declines in volumes for convenient foods and beverages across various locations and segments within the business, Pepsi demonstrated its resilience by leveraging its pricing power to overcome these challenges.
The company expressed their delight with their second-quarter performance, noting that their business was continuing to gather strong momentum
Chairman and CEO Ramon Laguarta announced that due to these developments, they are revising their projections. They now anticipate a 10 percent increase in full-year organic revenue (previously 8 percent), as well as a 12 percent increase in core constant currency EPS (previously 9 percent).
The North American operations of both Quaker Foods and PepsiCo Beverages experienced a decline in volumes, with a decrease of 5 percent and 4.5 percent respectively on an annual basis.
The Africa, Middle East, and South Asia division faced a disappointing performance, while the European convenient foods and beverages division, along with the Asia/Pacific division posted remarkable growth.
Europe emerged as the standout region with a remarkable 46% year-over-year increase in profits, solidifying its position as the top-performing geography by a significant margin. The Management reaffirmed their outlook for 2023, with expectations of distributing $6.7 billion in dividends and executing share repurchases amounting to $1 billion.
Furthermore, the full-year guidance for core earnings per share (EPS) has been revised upwards from $7.27 to $7.47. This reflects a projected 10% increase compared to the previous year’s earnings of $6.79.
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