PepsiCo raised its earnings outlook for 2015 after delivering financial results that beat the expectations of Wall Street analysts in the second quarter. The shares of the beverage and snack company were trading $95.90 per share, up by 0.30% around 11:52 AM in New York.

PepsiCo

PepsiCo 2015 outlook

Pepsico is now expecting to achieve an 8% core constant currency EPS growth this year. The company previously estimated to achieve a 7% EPS growth for 2015. It is anticipating an 11% adverse impact from foreign exchange translation to its core earnings per share.

According to the company, it is on track to deliver approximately $1 billion productivity savings and $8.5 billion to $9 billion cash returns to shareholders.

“PepsiCo achieved strong financial performance in the second quarter. We delivered mid-single digit organic revenue growth, strong gross margin expansion and double-digit core constant currency EPS growth,” said PepsiCo Chairman and CEO Indra Nooyi.

Nooyi added that the financial performance of PepsiCo reflected their focus on innovation, brand building, and marketplace execution. “Through scientific R&D and strategic insights, we are developing sustainable innovation to offer consumers the range of food and beverage choices they’re looking for and creating a powerful platform for growth,” she said.

PepsiCo second-quarter results

PepsiCo reported that its GAAP earnings increased 3% to $1.33 per share. Its adjusted earnings were $1.32 per share, higher than the $1.24 per share consensus estimate.

PepsiCo said its revenue declined 5.7% to $15.92 billion from $16.89 billion. The decline was primarily due to a ten percentage points negative impact from foreign exchange translation.Analysts expected the company to achieve $15.81 billion in revenue.

According to the company, its core gross margin increased 115 basis points, and core operating margin climbed 60 basis points. PepsiCo said its operating margin improvement was driven by its effective revenue management strategies and productivity initiatives.

PepsiCo’s operating profit increased 8%. Its reported effective tax was 26.1%, lower than its 26.5% tax rate in the same period last year.

According to the company, Frito-Lay North America (FLNA) was positively impacted by productivity gains and lower commodity costs during the second quarter.

Quaker Foods North America was negatively affected by an increase in advertising and marketing expense. Latin America Foods was positively impacted by productivity gains.

PepsiCo Americas Beverages benefited from productivity gains, lower commodity costs and certain insurance adjustments.

In Europe, Pepsico was negatively affected by cost inflation, but it benefited from productivity gain and lower commodity costs in Asia, Middle East and Africa.