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PepsiCo Q1 Results Top Estimates, Reaffirms FY19 Outlook

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Snack and beverage giant PepsiCo Inc. (PEP) on Wednesday reported an increase in net income for the first quarter, reflecting higher revenues.

Both adjusted earnings per share and net revenues for the quarter beat analysts' estimates. The company also reaffirmed its earnings and organic revenue growth outlook for the full-year 2019.

"We are pleased with our results for the first quarter. While adverse foreign exchange translation negatively impacted our reported net revenue performance, our underlying organic revenue growth accelerated to more than 5% in the quarter," said Chairman and CEO Ramon Laguarta.

For the first quarter, net income attributable to the company grew to $1.41 billion or $1.00 per share from $1.34 billion or $0.94 per share in the year-ago quarter.

Core earnings for the quarter were $0.97 per share, compared to $.96 per share in the year-ago quarter. On average, 20 analysts polled by Thomson Reuters expected the company to earn $0.92 per share for the quarter.

Net revenue for the quarter grew 2.6 percent to $12.88 billion from $12.56 billion last year. Analysts expected revenues of $12.70 billion. Organic revenue growth for the quarter was 5.2 percent.

In the quarter, Frito-Lay North America, Latin America, Europe, Sub-Saharan Africa and North America Beverages reported higher revenues. These were partly offset by lower revenues in Quaker Foods North America and Asia, Middle East and North Africa.

"With our strong start to the year and good momentum on our key priorities, we remain confident in achieving the 2019 financial targets we communicated earlier this year," Laguarta added.

Looking ahead to fiscal 2019, PepsiCo still projects core earnings per share of $5.50, representing a 3 percent decrease compared to 2018 core earnings per share of $5.66. The Street expects earnings of $5.51 per share for the year.

The company also continues to expect full-year organic revenue growth to be 4 percent.

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