PepsiCo adjusted earnings rise as consumers stock up, but company yanks outlook

• PepsiCo reported first-quarter adjusted earnings of $1.07 per share on revenue of $13.88 billion.
• The company is not suspending its buyback program or cutting its quarterly dividend.
• In March, Pepsi announced that it agreed to buy Rockstar Energy in a deal valued at $3.85 billion. 

PepsiCo on Tuesday reported its first-quarter adjusted earnings rose 10% as consumers stocked up on its drinks and snacks to prepare to spend more time at home.

However, the company pulled its fiscal 2020 outlook, citing “the uncertainties associated with the magnitude and duration of the Covid-19 pandemic on our business.”


Shares of the company rose 1% in premarket trading.

Here’s what the company reported:

• Earnings per share: $1.07, adjusted
• Revenue: $13.88 billion

The Frito-Lay owner-reported fiscal first-quarter net income of $1.34 billion, or 96 cents per share, down from $1.41 billion, or $1.00 per share, a year earlier.

Excluding items, Pepsi earned $1.07 per share.

Net sales rose 7.7% to $13.88 billion. The company reported organic revenue growth of 7.9%.


Frito-Lay North America and Quaker Foods North America, which has struggled in recent quarters, both saw organic revenue grow by 7% during the quarter. It's North American drinks business reported organic revenue growth of 6%.

Wall Street anticipated earnings per share of $1.03 on revenue of $13.21 billion, based on a survey of analysts by Refinitiv. However, it’s difficult to compare reported earnings to analyst estimates for Pepsi’s quarter, as the coronavirus pandemic has made it difficult to predict earnings.

Pepsi withdrew its fiscal 2020 forecast. In February, the company said it expected 4% organic revenue growth and 7% earnings per share growth after stripping out currency fluctuations in 2020.

However, the company is still expecting to repurchase $2 billion in shares and spend $5.5 billion on dividends in fiscal 2020, even as many other publicly traded companies suspend their buyback programs and slash their dividends to preserve cash.

Pepsi also said Tuesday that it has closed its $3.85 billion acquisition of Rockstar Energy, freeing up the company to make distribution deals with other energy drink makers. The company said that it has signed an exclusive U.S. distribution deal with Vital Pharmaceuticals, which makes the fast-growing Bang performance energy drinks.

Read the full earnings report here.