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.

What did you think of the quarter? Let us know in the comment section below!

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Disclosure: At the time of publication, we have no positions in any of the securities mentioned in this article. We wrote this article myself [ourselves], and it expresses my [our] own opinions. We are not receiving compensation for creating this article (other than from TheStreet) and have no business relationship with any company whose stock is mentioned in this article.

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Comments (5)
No. 1-3
JavierFrausto
JavierFrausto

Pepsi> Coke

kperkins2
kperkins2

Now time for the real question. Pepsi or Coke?

Nikhil Gunderia
Nikhil Gunderia

That photo at the top of the article is dope