PepsiCo Inc. raised its earnings growth forecast and reported results that beat expectations as consumers absorbed higher prices on the company’s snacks and beverages.
(Bloomberg) — PepsiCo Inc. raised its earnings growth forecast and reported results that beat expectations as consumers absorbed higher prices on the company’s snacks and beverages.
Earnings of $2.25 per share for the third quarter were above analysts’ average estimate of $2.16. The maker of Tostitos chips and Mountain Dew sodas reported net revenue of $23.5 billion, also surpassing the consensus estimate.
Pepsi shares rose 2.5% in trading before US exchanges opened. Rival Coca-Cola Co. also gained. Purchase, New York-based Pepsi increased its guidance for full-year earnings while leaving the revenue growth estimate unchanged.
The stock has dropped more than 10% over the past three months, hurt by concerns about slowing sales growth and the potential impact on snacking of a new class of obesity medicines that subdue cravings. Organic revenue at the Frito-Lay unit rose 7% last quarter, half the rate of the prior quarter.
The company expects core earnings per share growth of 13% at constant currencies this fiscal year, up from a prior estimate of 12%. Its organic revenue growth forecast remains unchanged at 10%.
Pepsi said it continues to expect a negative 2 percentage-point foreign-exchange impact on revenue and core earnings per share growth.
(Updates with share reaction in third paragraph)
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