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PepsiCo Q4 Profit Matches Estimates; Organic Revenue Up 4.6%

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PepsiCo, Inc. (PEP) reported fourth-quarter core EPS of $1.49 compared to $1.31, prior year. Excluding the impact of foreign exchange translation, core constant currency EPS increased 17 percent year-over-year. On average, 19 analysts polled by Thomson Reuters expected the company to report profit per share of $1.49 for the quarter. Analysts' estimates typically exclude special items.

Fourth-quarter income before income taxes were $1.94 billion, down 17% from previous year. Net income to PepsiCo was $6.85 billion compared to a loss of $710 million, last year. Reported EPS was $4.83, an increase from the $0.50 loss per share in the fourth quarter of 2017.

For the fourth-quarter, reported net revenue was even with the prior year at $19.52 billion. Organic revenue grew 4.6 percent, for the quarter. Analysts expected revenue of $19.53 billion for the quarter.

For full-year 2018, core EPS was $5.66, an increase of 8 percent. Excluding the impact of foreign exchange translation, core constant currency EPS increased 9 percent for the full year. Reported net revenue increased 2 percent. Organic revenue grew 3.7 percent, for the period.

"For the year we met or exceeded each of the financial objectives we set out at the beginning of the year. Frito-Lay North America and each of our international sectors performed very well, and our North America Beverages sector made progress throughout the year," said CEO Ramon Laguarta.

For 2019, PepsiCo expects 4% organic revenue growth and approximately 1% decline in core constant currency EPS. The company expects to return to high-single-digit core constant currency EPS growth in 2020.

PepsiCo said it expects long-term financial performance of: 4 to 6 percent organic revenue growth; and high-single-digit core constant currency EPS growth. The company expects to generate productivity savings of at least $1 billion annually through 2023. In connection with the restructuring actions, the company expects to incur pre-tax charges of approximately $2.5 billion through 2023.

Also, PepsiCo announced a 3 percent increase in its annualized dividend per share to $3.82 from $3.71 per share, effective with the dividend expected to be paid in June 2019.

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