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Key Takeaways
- Higher prices lifted PepsiCo’s earnings, but lower volumes and currency issues dragged down its revenue.
- The soft drink and snack food maker said disadvantageous foreign exchange rates lowered revenue by 1.5%.
- PepsiCo raised its annual dividend to $5.42 per share from $5.06.
PepsiCo (PEP) reported better-than-expected profit as it benefited from higher prices, but revenue fell for the first time in almost four years because of lower volumes and disadvantageous currency exchange rates. Shares fell 2.6% in intraday trading Friday following the news.
The maker of soft drinks and snacks posted fourth quarter earnings per share (EPS) of $1.78, beating estimates. Sales declined 0.5% from a year ago to $27.85 billion, short of forecasts.
The company noted that foreign exchange rates negatively impacted revenue by 1.5%. Organic revenue was up 4.5% as Pepsi boosted prices. However, those higher prices reduced volumes for both its convenience foods and beverages units, which fell 3% and 2%, respectively.
CEO Ramon Laguarta said the company navigated “another year of elevated levels of inflation, macroeconomic volatility, geopolitical tensions and international conflicts.” He added that Pepsi is confident that its business will perform well in 2024, “in the context of changing marketplace conditions.”
The company predicted its full-year organic revenue growth will be at least 4%, and core constant currency EPS will be up at least 8%.
Pepsi also announced an increase in its annual per share dividend to $5.42 from $5.06, effective for the payout scheduled for June.
The news sent shares of PepsiCo into negative territory over the past year.
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