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PepsiCo Beats Q3 Earnings Forecast, Boosts Full-Year Guidance, As Snack Sales Continue Lead Revenue Growth

PepsiCo beat Wall Street forecasts for both the top and bottom line in its third quarter earnings report as customers bought more snacks from its Frito Lay division while working and staying at home during the coronavirus pandemic.

PepsiCo PEP posted stronger-than-expected third quarter earnings Thursday, and forecast solid full-year profits, as pandemic snack sales continued to pace top line growth. 

PepsiCo said earnings for the three months ending in August were pegged at $1.65 per share, up 5.8% from the same period last year and well ahead of the Street consensus forecast of $1.49 per share. Group revenues, PepsiCo said, rose 5.3% to $18.1 billion, again topping analysts forecasts of a $17.3 billion tally.

Looking into the final months of the year, PepsiCo said it sees core earnings of $5.50 per share, jumping ahead of the Refinitiv forecast of $5.36 per share.

“Despite the ongoing volatility and complexity in our operating environment, I believe our third quarter performance reinforces the diversification of our portfolio, the resilience and agility of our teams across every continent and demonstrates our ability to support our customers and communities during their time of need while also delivering good results for our shareholders,” said CEO Ramon Laguarta.“

"Our reported revenue increased 5.3%, while our reported earnings per share increased 10%," he added. "Organic revenue increased 4.2% and core constant currency earnings per share increased 9%. These results reflect the continued strength of our global snacks and food business and a significant improvement in our global beverage business"

PepsiCo shares were marked 0.2% higher in early trading immediately following the earnings release to change hands at $138.65 each, pegging their six-month gain at 17.4%.

PepsiCo said revenues at its Frito Lay division rose 7% from last year, while the topline at Quaker Foods jumped 6%. Beverages said were 6% higher, the company said.