Consumer Products

Does Pepsi Deserve More Credit for Q2 Earnings?

When PepsiCo Inc. (NASDAQ: PEP) released its second-quarter financial results before the markets opened on Tuesday, the firm said that it had $1.54 in earnings per share (EPS) and $16.45 billion in revenue. That compares with consensus estimates that called for $1.50 in EPS and $16.42 billion in revenue, as well as the $1.61 per share and $16.09 billion posted in the same period of last year.

In terms of its segments, the firm reported as follows:

  • Frito-Lay North America revenues increased 4.5% year over year to $4.01 billion.
  • Quaker Foods North America revenues increased 2.5% to $540 million.
  • PepsiCo Beverages North America revenues increased 2.5% to $5.32 billion.
  • Latin America revenues increased 2.3% to $1.89 billion.
  • Europe Sub-Saharan Africa revenues were flat at $3.13 billion.
  • Asia, Middle East and North Africa revenues were flat at $1.56 billion.

Looking ahead to the 2019 full year, the company expects to see organic revenue growth of 4% and a decline in core constant currency EPS of roughly 1% (core EPS of $5.50). Consensus estimates call for $5.53 in EPS and $66.51 billion in revenue.

Ramon Laguarta, PepsiCo’s board chair and chief executive, commented:

While adverse foreign exchange translation negatively impacted our reported net revenue performance, our organic revenue growth was 4.5% in the quarter. We are also pleased with the progress on our priorities to make PepsiCo a faster, stronger and better company by building new capabilities, strengthening our brands, adding capacity to grow and transforming our culture. Our performance for the first half and the progress we are making on our strategic priorities give us increased confidence in achieving the 2019 financial targets we communicated earlier this year.

Shares of PepsiCo were last seen down 0.4% at $132.06, in a 52-week range of $104.53 to $135.24. The consensus price target is $127.84.