PepsiCo Inc. (Nasdaq: PEP) reported better than anticipated fiscal 2023 second-quarter earnings and revenues. While reporting second-quarter earnings that were higher than comparable periods last year, the snacks and beverage company also upwardly revised its FY 2023 outlook. The stock of Pepsi closed last Friday’s trading session at $188.21, almost unchanged from the prior close.
Purchase, New York-based PepsiCo reported second-quarter revenues of $22.32 billion, up 10.30% from $20.23 billion in the second quarter of fiscal 2022.
For the latest quarter, which ended June 17, 2023, the company posted earnings of $2.75 billion, or $1.99 per share, an increase from $1.43 billion, or $1.03 per share, in the quarter ended June 11, 2022.
Excluding mark-to-market net impact, restructuring and impairment charges, acquisition and divestiture-related charges, and impairment and other charges/credits, Q2 2023 non-GAAP net income was $2.89 billion, or $2.09 per share, compared with $2.58 billion, or $1.86 per share, in Q2 2022.
Analysts surveyed by Refinitiv had anticipated the company to post earnings of $1.96 per share on revenues of $21.73 billion.
Commenting on the results, Chairman and CEO, Ramon Laguarta, stated “Our strong performance and the progress we are making on our strategic priorities give us confidence that the investments we are making to become an even faster, even Stronger, and even Better organization by Winning with pep+ are working.”
Segment wise:
- Frito-Lay North America revenues surged 13.90% y-o-y to $5.90 billion.
- Quaker Foods North America revenues increased to $684 million from $675 million.
- PepsiCo Beverages North America revenues were $6.76 billion, an increase of 10.40% from last year.
- Latin America revenues jumped 18.30% y-o-y to $2.86 billion.
- Europe revenues rose to $3.43 billion, up 13.30% on a y-o-y basis.
- Africa, Middle East, and South Asia revenues fell by 7.50% to $1.57 billion.
- Asia Pacific, Australia and New Zealand, and China Region revenues were $1.13 billion, almost unchanged from the previous year.
Looking ahead, Pepsi now projects FY 2023 organic revenue growth of 10%, reflecting an upward revision from its earlier outlook of an 8% increase. Furthermore, the company upwardly revised the core earnings per share growth to 12% from the earlier guidance level of 9%. This translates to core earnings of $7.47 per share, upwardly revised from an earlier outlook of $7.27 per share. Analysts currently anticipate the company to post earnings of $7.32 per share.
For FY 2023, Pepsi also reaffirmed its outlook on cash return to shareholders at roughly $7.70 billion, including dividends and share repurchases of $6.70 billion and $1 billion, respectively.
The quarterly earnings beat and upward revision of the FY 2023 outlook are expected to keep the stock of PepsiCo slightly bullish in the short term.
The historical price chart indicates that the stock of Pepsi is ascending after testing support at 182.50. The next resistance is anticipated to be near 192. Additionally, the stock is trading above its 50-day moving average while the MACD indicator is showing a positive reading. Therefore, we anticipate Pepsi’s stock to remain in an uptrend in the near future.
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