PepsiCo Raises Profit Forecast as Results Beat Estimates

PepsiCo Inc. raised its earnings growth forecast and reported results that beat expectations as consumers absorbed higher prices on the company’s snacks and beverages.

(Bloomberg) — PepsiCo Inc. raised its earnings growth forecast and reported results that beat expectations as consumers absorbed higher prices on the company’s snacks and beverages.

Earnings of $2.25 per share for the third quarter were above analysts’ average estimate of $2.16. The maker of Tostitos chips and Mountain Dew sodas reported net revenue of $23.5 billion, also surpassing the consensus estimate. 

Pepsi shares rose 2.5% in trading before US exchanges opened. Rival Coca-Cola Co. also gained. Purchase, New York-based Pepsi increased its guidance for full-year earnings while leaving the revenue growth estimate unchanged. 

The stock has dropped more than 10% over the past three months, hurt by concerns about slowing sales growth and the potential impact on snacking of a new class of obesity medicines that subdue cravings. Organic revenue at the Frito-Lay unit rose 7% last quarter, half the rate of the prior quarter. 

The company expects core earnings per share growth of 13% at constant currencies this fiscal year, up from a prior estimate of 12%. Its organic revenue growth forecast remains unchanged at 10%. 

Pepsi said it continues to expect a negative 2 percentage-point foreign-exchange impact on revenue and core earnings per share growth.

(Updates with share reaction in third paragraph)

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