Home News PepsiCo profits rise with higher prices, but falling volumes hurt sales

PepsiCo profits rise with higher prices, but falling volumes hurt sales

by SuperiorInvest

Key takeaways

  • Higher prices boosted PepsiCo’s profits, but lower volumes and currency problems dragged down its revenue.
  • The soft drink and snack maker said unfavorable exchange rates reduced its revenue by 1.5%.
  • PepsiCo raised its annual dividend to $5.42 per share from $5.06.

PepsiCo (PEP) posted better-than-expected earnings as it benefited from higher prices, but revenue fell for the first time in nearly four years due to lower volumes and disadvantageous exchange rates. Shares fell 2.6% in intraday trading on Friday following the news.

The soft drink and snack maker posted fourth-quarter earnings per share (EPS) of $1.78, beating estimates. Sales fell 0.5% from a year earlier to $27.85 billion, below forecasts.

The company noted that foreign exchange rates negatively affected revenue by 1.5%. Organic revenue increased 4.5% as Pepsi boosted prices. However, those higher prices reduced volumes of both its prepared foods and beverage units, which fell 3% and 2%, respectively.

CEO Ramón Laguarta said the company went through “another year of high levels of inflation, macroeconomic volatility, geopolitical tensions and international conflicts.” He added that Pepsi is confident its business will perform well in 2024, “in the context of changing market conditions.”

The company predicted that its full-year organic revenue growth will be at least 4%, and that constant-currency EPS will increase at least 8%.

Pepsi also announced an increase in its annual dividend per share to $5.42 from $5.06, effective for the payment scheduled for June.

The news sent PepsiCo shares into negative territory over the past year.


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