PepsiCo revenue beats estimates as sales rise in North America
By Sruthi Ramakrishnan
(Reuters) - PepsiCo Inc (PEP.N: Quote) reported better-than-expected quarterly net revenue on Thursday as higher sales of snacks and non-fizzy beverages such as Gatorade in North America helped reduce the impact of a strong dollar.
PepsiCo increased its annual dividend to $3.01 per share from $2.81 and said it would return about $7 billion to shareholders this year, with about $3 billion through buybacks.
However, the company forecast 2016 adjusted earnings below many analyst estimates, citing a strong dollar and the exclusion of its Venezuelan business from its financial statements.
Revenue from PepsiCo's North American beverages business rose 2 percent in the fourth quarter ended Dec. 26, accounting for 31.5 percent of total revenue.
Wells Fargo Securities said in a pre-earnings note that its research showed that PepsiCo's beverage sales in U.S. convenience stores rose 3.2 percent in the quarter, helped by aggressive pricing and "solid" sales of Gatorade and Starbucks (SBUX.O: Quote) ready-to-drink coffee, which Pepsi distributes.
PepsiCo Chief Executive Indra Nooyi said warmer-than-usual weather also helped the company's drinks business.
"Gatorade does well when the temperature's above normal," she said on a conference call with analysts.
Higher prices and reduced pack sizes helped boost revenue by 2 percent in the company's North America snack foods business, which includes Frito-lay and Doritos chips. Continued...