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Pepsi Q4 results: shares up 2% after earnings revenue meets estimates

Pepsi’s positive revenue report has driven up shares of the company. Pepsi’s Q4 results met Wall Street expectations.

Pepsi Q4 earnings:key figures

Earnings per share (EPS) $1.49
Revenue $19.52 billion

Pepsi earnings

Pepsi’s earnings per share (EPS) were $1.49, keeping in line with financial experts’ estimates. Pepsi’s revenue was $19.52 billion, also matching Wall Street’s estimates. Sales growth came from its Mountain Dew soft drinks and Frito- Lay food division. Chief executive officer, (CEO), Ramon Laguarta, spoke about Pepsi’s Q4 results.

‘We are pleased with our results for the fourth quarter and the full year 2018.We met or exceeded each of the financial objectives we set out at the beginning of the year. Frito-Lay North America and each of our international sectors performed very well, and our North America Beverages sector made progress throughout the year,’ said Laguarta.

Chief financial officer, Hugh Johnston, also spoke of how an increase of investment in advertising and marketing helped Pepsi’s Q4 earnings. The company plans to balance its increase in advertising spending with $1 billion in cuts in spending through many options, including layoffs of employees. While the company will cut some jobs that can be automated, there will be an increase in warehouse jobs and direct store delivery employees.

‘As other consumer product companies were taking a very extreme approach to cost-cutting, we had always said we were going to take a more balanced approach. We felt like the balanced approached of reducing cost, investing some money back to growth was in fact the right approach,’ said Johnston.

What do Pepsi’s Q4 results mean for their share price?

Pepsi’s Q4 results have been a benefit to its share price. Because of the investment in Frito-Lay foods and acquisition of the SodaStream sparkling drink device, Pepsi has been able to survive the trend of US consumers drinking fewer sugary beverages. The positive earnings report could increase the soft drink company’s current share price of $115.07.

How do Pepsi’s Q4 results compare to other beverage stocks?

Pepsi’s Q4 results are positive like Coca-Cola’s recent earnings report that also met Wall Street expectations. Though both companies have weaker-than-expected forecasts for the next quarter, Pepsi’s stock has risen, while Coca-Cola’s has dropped.

What is Pepsi’s dividend forecast?

While Pepsi had an earnings report that matched predictions, Pepsi’s dividend forecast is disappointing to some investors. Pepsi is predicting that it will have an EPS $5.50 in Q1, less than Wall Street’s projected $5.86. The beverage company said that earnings will decline as the company has ‘incremental investments that are intended to further strengthen the business.’

Laguarta said that Pepsi will continue its sales growth from 2018 in Q1.

‘In 2019, we aim to capitalise on the momentum we have as we enter the year, and to continue to invest in the capabilities that will better position us for success for years to come,’ said Laguarta.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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