This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

PepsiCo CFO: We Are 'Looking At' Possibly Releasing Organic Gatorade

2/11/16 11:46 AM EST
Amid more challenging economic conditions globally, PepsiCo’s (PEP) momentum lost a little bit of fizz in the fourth quarter. On Thursday, the beverage giant reported fourth quarter earnings of $1.06 a share, in line to Wall Street forecasts. Total revenue fell 7% year over year to $18.6 billion, narrowly surpassing estimates for $18.5 billion. Excluding the impact of the stronger U.S. dollar, PepsiCo’s revenue rose 4%. Gross profit margins surged 165 basis points as PepsiCo benefited from lower costs for oil and several agricultural commodities, as well as roughly $1 billion in cost savings taken in 2015. ‘Our portfolio has been strategically designed to weather the current macroeconomic challenges -- our results reflect the balance of our brand portfolio, geographic footprint, consistent marketplace execution and a relentless focus on productivity,’ said PepsiCo chairman and CEO Indra Nooyi in a statement. The standout for the quarter was PepsiCo's Frito Lay North America division, where organic revenue and operating profits rose 3% and 6%, respectively. The snack segment’s volume increased by 1%. Organic revenue excludes the impact of currency fluctuations, acquisitions and one-time items. On the other hand, the North American beverage business saw organic volume rise 1%, cooling from 3% growth in the third quarter. Organic revenue for the segment gained 3%, with operating profits improving by a similar amount. PepsiCo pointed out that it was the segment’s best profit performance in three years, helped by a combination of cheaper commodities, cost savings and pricing benefits from smaller can sizes. But, PepsiCo’s rival Coca-Cola (KO) managed to improve its volume performance in its U.S. beverage business in the fourth quarter. Coke's overall volume in its North America beverage segment increased 3%, driven by Coke Zero, Sprite, Fanta, juice, tea and packaged water. The company highlighted a decline in volume for Diet Coke. Coke’s beverage volume in North America only rose by 1% in the third quarter. Said PepsiCo vice chairman and CFO Hugh Johnston in an interview with TheStreet, ‘If we look narrowly at colas the answer is yes [we have lost a little share].' Johnston added, ‘But the strategy of the business is to manage the overall liquid refreshment beverage category not just one sub-segment called colas – obviously for our competitor that is by far the biggest piece of their business and they tend to spend a lot of time on that.' Meantime, Quaker Foods North America’s organic revenue rose 1% compared to 2% growth in the previous quarter. Organic volume fell 2% for the segment, while operating profits were unchanged. Despite slowing growth globally, the company capped off a year in which organic revenue and earnings rose by 5% and 10%, respectively. In 2016, PepsiCo’s expects earnings of $4.66 a share, up about 1.9% year over year. Wall Street had estimated PepsiCo earning $4.76 a share this year. The company anticipates cutting another $1 billion in costs as part of a plan to slash about $5 billion in costs through 2019. Execs also decided to lift the dividend by 7.1%.
Stocks in this video: PEPKO
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
Real Money Pro

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Trifecta Stocks

Trifecta Stocks analyzes over 4,000 equities weekly to find the elite 1% of stocks that pass rigorous quantitative, fundamental and technical tests.

Product Features:
  • Model portfolio
  • Trade alerts
  • Recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Growth Seeker

Chris Versace, using sophisticated stock screening and fundamental research, identifies potentially explosive small and mid-cap stocks.

Product Features:
  • Model portfolio
  • Small-cap and mid-cap focus
  • Intraday trade alerts
  • Weekly roundups
Daily Swing Trade

Master swing trader Alan Farley uses his sophisticated software screens to review thousands of stocks each day for you, to find just the handful that meet his demanding criteria.

Product Features:
  • Daily commentary and coaching on swing trading
  • Technical charts and analysis
Top Rated Stocks Top Rated Funds Top Rated ETFs