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PepsiCo Earnings Top Q3 Estimates As Company Raises Revenue Forecast

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PepsiCo Inc (NASDAQ:PEP) topped analysts’ expectations in terms of third-quarter earnings, with the company raising its full-year estimates despite supply chain and inflation. Pepsi stock edged below 1% on Tuesday.

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Earnings Report

As informed by CNBC, supply chain disruptions, and inflationary pressures for labor, commodities, and transportation were all computed in the company’s fiscal results for the quarter.

In terms of earnings per share, the company topped $1.79 against a $1.73 estimate. Likewise, the company reported a revenue of $20.19 billion, well above the $19.39 estimates.

“For the quarter ended Sept. 4, net income fell to $2.22 billion, or $1.60 per share, from $2.29 billion, or $1.65 per share, a year earlier,” according to CNBC.

“Net sales rose 11.6% to $20.19 billion, beating expectations of $19.39 billion. The company’s organic revenue, which strips out the impact of acquisitions and divestitures, climbed 9% in the quarter.”

Organic revenue of the firm’s beverage division grew 7% for the quarter, as organic sales of the business have increased by 10% in the last two years. Pepsi reported a double-digit net revenue increase in its foodservice division.

Adjusted Forecast

Organic revenue of Frito-Lay jumped by 5%, as snacking habits in the pandemic continued among consumers, with Pepsi even increasing market share in the salty and savory snack categories in the third quarter.

“Quaker Foods North America, which has been the most challenged of Pepsi’s business units, saw its organic revenue increase by 1%,” CNBC reported, as the segment faced a volume decrease, “which excludes the impact of price changes, and reported the largest drop in operating profit.”

On the Q3 earnings results, the company has adjusted its organic revenue growth to 8% for the full, 2 percentage points above the previous growth forecast.

According to FX Street, “Although the company is gaining ground on organic sales, the stock price has declined since August 20.”

“Although then it hit a high of 159, it has since been fluctuating between 150 and 159. The most recent drop came on September 30, when the price went below 150 for the first time since July 2021.”