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Pepsico Q2 Adj. Profit, Revenue Top View; Lifts FY22 Revenue Forecast

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Snack and beverage giant PepsiCo Inc. (PEP) reported Tuesday weak profit in its second quarter. Core earnings and topline, however, beat market estimates.

Looking ahead, the company now expects to deliver 10 percent organic revenue growth for fiscal 2022, compared to previous guidance of 8 percent. Further, the company continues to expect an 8 percent increase in core constant currency earnings per share.

In pre-market activity on Nasdaq, Pepsico shares were gaining around 1 percent.

Chairman and CEO Ramon Laguarta said, ".... our business momentum continued despite ongoing macroeconomic and geopolitical volatility and higher levels of inflation across our markets.... Our performance also gives us confidence that our investments to become an even Faster, even Stronger, and even Better organization by winning with pep+ are working."

For the second quarter, net income attributable to the company declined to $1.43 billion from last year's $2.36 billion.

Earnings per share were $1.03, down 39 percent from prior year's $1.70.

Core net income was $2.58 billion or $1.86 per share, compared to prior year's $2.39 billion or $1.72 per share.

On average, 18 analysts polled by Thomson Reuters expected earnings of $1.74 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue grew 5.2 percent to $20.23 billion from last year's $19.22 billion. Organic revenue growth was 13 percent. Analysts estimated revenues of $19.51 billion for the quarter.

In the quarter, total volume for Convenient Foods increased 3 percent, and Beverages grew 6 percent.

Frito-Lay North America revenue increased 14 percent to $5.18 billion, despite a 2 percent drop in volume.

Quaker Foods North America revenue grew 17 percent on a reported basis and 18 percent organically, with 2 percent volume growth.

Revenues from PepsiCo Beverages North America dropped 1 percent to $6.12 billion with weak volume, but grew 9 percent organically.

Latin America recorded 23 percent revenue growth with higher volume. Europe revenue fell 8 percent on a reported basis with weak volume, but grew 9 percent organically.

Africa, Middle East and South Asia, as well as Asia Pacific, Australia and New Zealand and China Region reported higher revenues and volumes.

PepsiCo shares settled on Monday at $170.47, down 0.8 percent. In pre-market activity on Nasdaq, shares were gaining 0.9 percent to trade at $172.

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