Returning Restaurant Demand Fuels PepsiCo, Inc. (NASDAQ: PEP) Raised Forecast After its Recorded Earnings Crushed Estimates

PepsiCo, Inc. (NASDAQ: PEP) announced that it had a quarterly revenue rise of over 20% from the previous year as restaurants demand the return of its drinks. However, the company also looked differently at its earnings per share growth.

Hugh Johnston, the company’s CFO, told “Squawk Box” that a lot of the things that were done during the pandemic, like continuing to make re-investments back into the company, are now starting to pay off now that consumers are out of the house more and mobility has increased. As a result, PepsiCo shares rose to over 2-percent in the morning trading period, which was a new all-time high. This year the stock has gone up by 3-percent, giving it a $211 million market value.

What PepsiCo reported

Pepsi’s reported Q2 fiscal year filings looked a lot different from what Wall Street had expected. A survey conducted by Refinity showed that:

  • Its earnings per share was $1.53 (expected) vs. $1.72 (adjusted)
  • Its revenue was $17.96 billion (expected) vs. $19.22 billion

The company reported $1.70 per share, or a $2.36 billion net income, which was up from $1.18 per share, or $1.65 billion, recorded the previous year. Organic revenue, which beats the impact of acquisitions, foreign currency, and divestitures, increased by 12.8%.

Pepsi’s North American division recorded a 21% organic revenue growth. This was the division that reported the highest growth during this particular quarter. It had a 15% rise in volume for drinks, and its foodservice revenue streams, which consist of sales to college campuses, stadiums, and restaurants, doubled during this fiscal quarter.

The company believes that this strong quarter can allow them to be confident in expecting an 11% boost in currency earnings per share. This forecast implies a $6.20 core earnings per share for this year. Though, analysts had predicted a 7.2% full-year earnings growth. Johnston talked to Becky Quick of CNBC that the company was planning to develop more conservative forecasts in the future, which could then help it beat Q3 and Q4 expectations.

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Published by Nicholas Maithya

Nicholas is a Financial Analyst by profession, who enjoys writing about investments, technological developments, business, economics and other financial topics at various financial publications. Join him here on Wallstreetpr.com as he endeavors to deliver to you the latest breaking news on the above mentioned fronts. Contact him by email at nmaithya@gmail.com or follow Nicholas Kitonyi @nmaithyak on Twitter.