Snack and beverage giant PepsiCo Inc. reported Tuesday weak profit in its first quarter, while core earnings and revenues improved and beat market estimates. Further, the company lifted fiscal 2023 forecast for core earnings per share above the Street view, as well as organic revenue growth forecast.
In pre-market activity on Nasdaq, PepsiCo shares were gaining around 2 percent.
Looking ahead for fiscal 2023, PepsiCo now expects organic revenue to increase 8 percent and core constant currency earnings per share to increase 9 percent.
Previously, the company was projecting 6 percent organic revenue growth and 8 percent core constant currency earnings per share growth.
Core earnings per share for the year is now projected to be $7.27, a 7 percent increase compared to 2022 core earnings per share of $6.79.
The previous outlook was for core earnings of $7.20, a 6 percent increase from the prior year.
On average, 22 analysts polled by Thomson Reuters expect earnings of $7.26 per share for the year. Analysts' estimates typically exclude special items.
For the first quarter, net income attributable to the company fell to $1.93 billion from last year's $4.26 billion. Earnings per share were $1.40, down 54 percent from last year's $3.06.
Core earnings were $2.07 billion or $1.50 per share, compared to prior year's $1.80 billion or $1.29 per share. Analysts expected earnings of $1.39 per share for the quarter.
Net revenue grew 10.2 percent to $17.85 billion from last year's $16.20 billion. The Street was looking for revenues of $17.22 billion for the quarter. Organic revenue growth was 14.3 percent.
Convenient Foods volume dropped 3 percent, while beverages volume grew 1 percent.
Frito-Lay North America revenues climbed 15 percent, and the growth was 9 percent in Quaker Foods North America, 8 percent in PepsiCo Beverages North America, 21 percent in Latin America, 5 percent in Europe, and 2 percent in Africa, Middle East and South Asia.
Meanwhile, revenues from Asia Pacific, Australia and New Zealand and China Region dropped 1 percent from last year.
In pre-market activity on Nasdaq, PepsiCo shares were trading at $188.82, up 1.79 percent.
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