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Reported (GAAP) First Quarter 2017 Results PEP

|Includes: PepsiCo Inc. (PEP)

The beverage and snacks giant reported on Wednesday that first quarter earnings, excluding one-time items, came in at 94 cents a share. Wall Street had expected 92 cents a share. Total revenue rose 2% from the prior year to $12.04 billion, beating analyst forecasts for $11.98 billion.

While Pepsi saw volume declines in all its businesses except its Asia, Middle East and North Africa (AMENA) division, the company's cost cutting efforts continued to help pad the bottom line. Profits in PepsiCo's two most important businesses -- Frito Lay North America and North America Beverages -- rose 4% and 3%, respectively.

The company reiterated that it sees full year earnings, excluding one-time items, increasing 8% to $5.09 a share.

Meanwhile, rival Coca-Cola's first quarter lacked a whole bunch of fizz. That has incoming CEO James Quincey wasting no time to try and protect the bottom line

The beverage and snacks giant reported on Wednesday that first quarter earnings, excluding one-time items, came in at 94 cents a share. Wall Street had expected 92 cents a share. Total revenue rose 2% from the prior year to $12.04 billion, beating analyst forecasts for $11.98 billion.

While Pepsi saw volume declines in all its businesses except its Asia, Middle East and North Africa (AMENA) division, the company's cost cutting efforts continued to help pad the bottom line. Profits in PepsiCo's two most important businesses -- Frito Lay North America and North America Beverages -- rose 4% and 3%, respectively.

The company reiterated that it sees full year earnings, excluding one-time items, increasing 8% to $5.09 a share.

Meanwhile, rival Coca-Cola's first quarter lacked a whole bunch of fizz. That has incoming CEO James Quincey wasting no time to try and protect the bottom line.

Quincey told analysts on a conference call Tuesday that Coca-Cola would soon slash 1,200 jobs as part of a new $800 million cost savings plan. On a call later with reporters, Quincey confirmed the majority of the reductions would come from Coke's Atlanta-based headquarters.

The news arrives after the company posted tepid 2017 first quarter results. Revenue fell 11% year over year to $9.1 billion. Still, Coke beat the $8.89 billion expectation on Wall Street.

Earnings came in at 43 cents a share, compared to the 44 cents analysts surveyed at Factset anticipated. And, Coke said it sees full-year earnings per share declining 1% to 3%.

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Reported (GAAP) First Quarter 2017 Results

 
   
 

First Quarter

Net revenue growth

1.6%

Foreign exchange impact on net revenue

(1)%

EPS

$0.91

EPS growth

43%

Foreign exchange impact on EPS

(2)%

Organic/Core (non-GAAP)1 First Quarter 2017 Results

 
   
 

First Quarter

Organic revenue growth

2.1%

Core EPS

$0.94

Core constant currency EPS growth

7%

PepsiCo, Inc. (PEP) today reported results for the first quarter 2017.

"We achieved solid revenue growth in the first quarter underpinned by global volume growth and positive net price realization, despite challenging food and beverage industry trading conditions in North America and continued volatility in a number of developing and emerging markets," said Chairman and CEO Indra Nooyi. "Our first quarter results were in line with our expectations, and we are on track to achieve our financial objectives for 2017."

Summary of First Quarter Financial Performance:

  • Reported first quarter and year-ago results were impacted by:

·

    • Restructuring charges in conjunction with the multi-year productivity plan we publicly announced in 2014; and
    • Commodity mark-to-market impacts.
  • Reported year-ago results were impacted by a charge related to the transaction with Tingyi.
  • See A-6 to A-8 for further details on the above items.
  • Reported net revenue increased 1.6 percent. Foreign exchange translation had a 1-percentage-point unfavorable impact on reported net revenue. Organic revenue, which excludes the impacts of foreign exchange translation and structural changes, grew 2.1 percent.
  • Reported and core gross margin contracted 45 basis points. Reported operating margin expanded 240 basis points and core operating margin contracted 30 basis points. Reported operating margin expansion reflects the impact of the year-ago charge related to the transaction with Tingyi.
  • Reported operating profit increased 19 percent and core constant currency operating profit increased 1 percent. The impact of the charge related to the transaction with Tingyi in the prior year had a 23-percentage-point favorable impact on reported operating profit growth. Commodity mark-to-market adjustments reduced reported operating profit growth by 4 percentage points. Foreign exchange translation reduced reported operating profit growth by 1 percentage point.
  • The reported effective tax rate was 22.7 percent in the first quarter of 2017 and 31.9 percent in the first quarter of 2016. The first quarter 2016 tax rate was impacted by the charge related to the transaction with Tingyi, which had no corresponding tax benefit. The core effective tax rate was 22.5 percent and 24.7 percent in the first quarter of 2017 and 2016, respectively. The first quarter 2017 reported and core tax rate reflects the positive impact of a change in the accounting for certain aspects of share-based payments to employees.
  • Reported EPS was $0.91, a 43 percent increase from the prior year period, primarily reflecting the impact of the year-ago charge related to the transaction with Tingyi. Foreign exchange translation reduced reported EPS growth by 2 percentage points.
  • Core EPS was $0.94, an increase of 5.5 percent. Excluding the impact of foreign exchange translation, core constant currency EPS increased 7 percent (see schedule A-10 for a reconciliation to reported EPS, the comparable GAAP measure).
  • Net cash used in operating activities was $199 million.

Wall Street expects PepsiCo, Inc. PEP to report quarterly earnings at $0.91 per share on revenue of $11.23 billion before the opening bell. PepsiCo shares rose 0.30 percent to $114.50 in pre-market trading.

Supporting Documents

  1. q1_2017_fullrelease_hjetcwd9nnfy787r.pdf