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PepsiCo Tops Earnings Forecast, Boosts 2021 Outlook, as Drinks Sales Surge

North American beverages sales surged 24% from last year as sport stadiums, movie theatres and entertainment venues re-opened after months of pandemic triggered closures.

PepsiCo  (PEP) - Get Report posted stronger-than-expected second quarter earnings Tuesday, and boosted its full-year profit forecast, as drinks revenues surged thanks in part to the re-opening of sports and entertainment venues in the wake of the coronavirus pandemic. 

PepsiCo said core earnings for the three months ended on June 12 were pegged at $1.72 per share, up 30% from the same period last year and well ahead of the Street consensus forecast of $1.53 per share. 

Group revenues, PepsiCo said, rose 20.5.% to $19.22 billion, again topping analysts forecasts of a $17.98 billion tally. Beverages revenues in north America were up 24% from last year, PepsiCo said, while Frito Lay sales were up 7%.

Looking into the second half of the year, PepsiCo said it sees 11% growth for core earnings, as well as a 6% growth rate for organic revenues, with both tallies modestly higher than prior forecasts. 

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“We are pleased with our second quarter results as we delivered very strong double-digit net revenue and earnings per share growth. Given the strength of our results, we now expect our full year organic revenue to increase 6% and core constant currency earnings per share to increase 11%,” said CEO Ramon Laguarta. 

“Our results give us confidence that the investments behind our Faster, Stronger and Better framework are working - as we invest in our brands, supply chain and go-to market systems, manufacturing capacity, capabilities and culture, and our society by integrating purpose into everything we do," he added. "Moving forward, we remain focused on winning in the marketplace and building competitive advantages that will position us well as consumer habits and preferences evolve over time.”  

PepsiCo shares were marked 1.75% higher in early trading immediately following the earnings release to change hands at $152.15 each, a move that nudges the stock into a 2.7% gain for the year.