PepsiCo Inc (NYSE: PEP) Q2 Profit and Earnings Beat Estimates

PepsiCo Inc’s (NYSE: PEP) earnings and profit in the second quarter beat analyst estimates. Higher prices on snacks and sodas and the company’s sale of its stake in Britvic Plc (L: BVIC) helped push sales and earnings higher.

PepsiCo Inc (NYSE: PEP)

Shares of Pepsi were up in premarket trading, but fell 0.9% after the opening bell.

PepsiCo Inc (NYSE: PEP) Sales Volume Flat

 

Sales in Pepsi’s North America beverage sector, its largest unit, rose by 2% in the second quarter, coming in at $5.24 billion. Net pricing increased by 1%, but sales volume was flat.

Organic volume for snacks and other food increased by 2%.

Earnings came in at $1.44 per share, including six cents from the Britvic sale. Analysts were expecting $1.39 earnings per share.

Revenue increased by 2% to reach $15.71 billion, beating estimates of $15.59 billion.  Net income came in at $2.11 billion, up from $2.01 billion the previous year.

Gross margins were down by 50 basis points in the second quarter, down from the 115 basis points expansion in the same period last year.

PepsiCo Inc (NYSE: PEP) said in April that it expected its margins to remain under pressure in the second quarter.

Pepsi sees adjusted earnings per share in 2017 to hit $5.13, citing a lower impact from foreign exchange. The company previously forecasted $5.09 earnings per share. Analysts are projecting $5.12 per share.

The soda and snack company has continued expanding its “guilt-free” line of products as demand for fizzy drinks dwindles.

More than 45% of Pepsi’s sales now comes from its guilt-free products.

Revenue from the company’s Frito Lay unit rose 3% due to a 3% increase in net pricing and a 1% rise in volume.

PepsiCo still faces stiff competition from retailers like Amazon (NYSE: AMZN), and other packaged goods firms are reducing their market spending to boost profit.

Still, Pepsi’s stock is up 64% over the last five years compared to rival Coke’s (NYSE: KO) increase of just 14%.

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Ben Myers

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