PepsiCo reported better-than-expected fourth-quarter results driven by its Frito-Lay unit and North American beverage business.
Continue Reading Below
Shares rose as core earnings of $1.45 a share topped the $1.44 average estimate from analysts for the three months through December. Net income, which includes accounting adjustments and restructuring costs, fell 74 percent from a year earlier to $1.77 billion, or $1.26 a share, as the impact of a tax boost dissipated.
“We are pleased with our performance for 2019 as we met or exceeded each of the financial goals we outlined at the beginning of the year,” CEO Ramon Laguarta said in a statement.
Revenue in the last three months of the year rose 5.7 percent to $20.64 billion at the Purchase, New York-based company, topping projections.
Profit in Pepsi's North American beverage unit rose 5 percent to $460 million, as higher sales and productivity helped make up for increasing raw-material and marketing costs. Revenue climbed 4.1 percent to $6.23 billion.
At the Frito-Lay North America division, earnings rose 3.1 percent to $1.56 billion amid revenue growth and productivity savings, which were partially eroded by rising operating and marketing costs. Revenue at the unit grew 2.9 percent to $5.15 billion.
For the full year, PepsiCo earned $7.3 billion as revenue rose 3.9 percent from a year ago to $67.2 billion.
Looking ahead, PepsiCo sees 2020 earnings per share rising 6 percent to $5.88 when taking into account currency-exchange costs. The company expects organic revenue growth of 4 percent.
PepsiCo raised its annual dividend 7 percent to $4.09 a share, up from $3.82, and said it would buy back $2 billion worth of stock in 2020.
PepsiCo shares were up 6.9 percent year-to-date through Wednesday, outperforming the S&P 500's 4.6 percent gain.