PepsiCo (PEP) Beats with Third-Quarter 2020 Earnings Results
Emmanuella Nwokenkwo & Jacques Potts
On Thursday, before the opening bell, PepsiCo reported better-than-expected earnings results with its fiscal year 2020 third-quarter earnings release. On the top line, revenues of $18.09 billion exceeded expectations of $17.23 billion. On the bottom line, adjusted earnings per share of $1.66 exceeded expectations of $1.49 per share.
In addition to the positive headline numbers, PepsiCo’s organic revenue increased by 4.2 percent. Pepsi’s Frito-Lay and Quaker Foods businesses both reported organic revenue growth of 6%. Its North American beverage unit’s organic sales rose by 3% this quarter.
In the press release, Chairman and CEO Ramon Laguarta said: "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."
He also noted: “As the environment continues to evolve, we remain committed to executing on our strategy to become Faster, Stronger, and Better and win in the marketplace. Given our year-to-date business performance and based on what we can reasonably predict at this time, we are providing an update to our full-year 2020 guidance and now expect to deliver approximately 4 percent organic revenue growth and approximately $5.50 in core earning per share”.
For the full year, PepsiCo now expects approximately $10 billion in cash from operating activities and free cash flow of approximately $6 billion, and net capital spending of $4 billion. Total cash return to shareholders is expected to be approximately $7.5 billion, dividends of approximately $5.5 billion, and shares repurchases of approximately $2.0 billion.
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