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PepsiCo, Inc. Q4 Results and 2014 Guidance Like Trail Mix; Boosts Dividends and Buybacks

By Anders Bylund – Feb 13, 2014 at 9:08AM

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The fourth quarter was a mixed bag for PepsiCo, with more of the same to come in 2014.

Image source: PepsiCo.

PepsiCo (PEP -0.19%) reported fourth-quarter earnings before the opening bell on Thursday. The drinks and snack foods giant largely met analyst targets in the reported period. Looking ahead, Pepsi's 2014 guidance is a mixed bag. The stock wasn't moved much by the news, trading up just 0.3% in pre-market action.

Pepsi reported $1.05 of non-GAAP earnings per share on sales of $20.1 billion. Analysts were expecting $20.2 billion in sales and $1.01 per share on the adjusted bottom line. In 2014, Pepsi guided to adjusted earnings around $4.50 per share on "mid-single digits" revenue growth; Street firms currently expect $4.34 per share and 3.8% sales growth.

Snack food sales increased 3% year over year while soft drinks grew 1%.

"We look ahead to 2014 with confidence that our business is positioned to continue to perform well and to generate attractive returns for our shareholders," Pepsi CEO Indra Nooyi said in a prepared statement.

Walking the talk, the company also committed to increasing dividends and share buybacks by a total of 35% this year. Dividend checks will be boosted by 15% -- raising its annualized dividend to $2.62 per share from $2.27 per share, to take effect with the June payment -- and Pepsi promised to repurchase and retire about $5 billion of its own shares. By comparison, Pepsi's buybacks and dividend payments declined 1.4% in 2013 to stand at $6.4 billion.

The company, which owns Gatorade, Quaker Oats and other products, also announced a five-year, $5 billion cost-savings program. PepsiCo said its $5 billion in savings through 2019 is expected to come from actions such as speeding up investments in automated manufacturing, closing certain manufacturing plants, and expanding shared services.

The company said it is still on pace to achieve its previously announced three-year, $3 billion cost savings for 2012 through 2014.

-- Material from The Associated Press was used in this report.


Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends PepsiCo and owns shares of PepsiCo.

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