PepsiCo (PEP)�shares are bubbling over this morning after the beverage-and-snack giant reported better than expected third-quarter earnings and revenues.
Shares were up 2.7% at $62.59 in early trading after the �reported a 4.1% rise in third-quarter profits as volume rose.
The company reiterated its full-year guidance for high-single digit earnings growth, but lowered its expectations for the benefit from foreign exchange rates. This suggests expectations for slightly better growth from the underlying business.
The beat came despite a 21% jump in costs, which Pepsi managed to offset with higher prices.
Pepsi reported a profit of $2 billion, or $1.25 a share, up from $1.92 billion, or $1.19 a share, a year earlier. Core earnings, which exclude merger charges and mark-to-market losses or gains, rose to $1.31 a share from $1.22. Revenue surged 13% to $17.58 billion.
Analysts polled by Thomson Reuters had been forecasts core earnings of $1.30 a share on revenue of $17.18 billion.
Operating margin dipped to 16.5% from 18%, amid higher costs.
Pepsi’s Americas drinks business posted small volume growth, its soda business didn’t fare as well. Non-carbonated beverages led the volume growth, posting a mid-single-digit increase in non-carbonated beverages, including a 9% increase in Gatorade.
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