PepsiCo Beats Wall Street's First-Quarter Earnings Estimates in a Big Way

PepsiCo reported better-than-expected earnings today for its fiscal first quarter. Soda volume dipped in North America.

Tamara Walsh
Tamara Walsh
Apr 17, 2014 at 8:11AM
Consumer Goods

PepsiCo (NASDAQ:PEP) reported fiscal 2014 first-quarter earnings today before the market opened. The soda and snack giant blew past analyst estimates in the quarter, earning a profit of $0.83, which was eight cents better than the Street's forecasts. Wall Street was looking for earnings per share of $0.75 in the quarter. Pepsi's revenue of $12.6 billion was flat from the year-ago quarter, but it topped analyst estimates for revenue of $12.4 billion in the period.

Source: The Motley Fool.

Pepsi has been under pressure recently from activist investor Nelson Peltz to spin off its snack business from the soda business. "We continue to perform well, in part, because we have strong, balanced portfolios of brands, products and geographies that enable us to capture growth opportunities across multiple demand spaces while we responsibly manage through the volatility and challenges in other parts of the business," said Indra Nooyi, Pepsi's chief executive, in the company's press release.

The company, whose brands include Frito-Lay, Gatorade, Mountain Dew, and Tropicana, said global snack volume rose 2% while beverages were even from a year ago. In its closely watched North American beverage unit, PepsiCo said volume was even for the quarter ended March 22 as a 1% decline in sodas was offset by growth in other drinks. Core revenue rose as the company raised prices.

In the year ahead, Pepsi said it would return $8.7 billion to shareholders -- a 35% year-over-year increase -- through $3.7 billion in dividends and $5 billion  in share repurchases. The stock currently boasts a dividend yield of 2.7%. Shares of PepsiCo were up slightly in early trading on the news.

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