PepsiCo beats by $0.04, reports revs in-line; guides FY14; raises dividend 15%; plans to buyback $5 bln in stock this year; announces new $5 bln productivity program through 2019
Reports Q4 (Dec) earnings of $1.05 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $1.01; revenues rose 0.8% year/year to $20.12 bln vs the $20.21 bln consensus.
As a reflection of management's confidence in the company's strong and sustainable cash flow generation capacity, and consistent with its commitment to disciplined capital allocation, the company announced a 15% increase in its annualized dividend to $2.62 per share from $2.27 per share, to take effect with the June 2014 payment. The increase will be the 42nd consecutive annual increase in dividends per share. It also anticipates increasing share repurchases in 2014 to ~$5 billion. Combined, these programs are expected to return a total of $8.7 billion to shareholders in 2014, a 35% increase from 2013 levels.
The co announced a new 5-year, $5 billion productivity program (2015-2019). The savings are expected to come from accelerating investment in manufacturing automation, further optimizing the company's global manufacturing footprint, including closing of certain manufacturing facilities, re-engineering go-to-market systems in developed markets, expanding shared services and implementing simplified organization structures to drive efficiency. As a result of these actions, it expects to sustain ~$1 billion in annual productivity savings through 2019. The extended targets reflect a continuation of the benefits of the investments made and actions taken in recent years by the company to harmonize processes and systems and to drive greater global coordination across its businesses. The company remains on track to achieve its previously announced 3-year, $3 billion productivity target for 2012-2014, with ~$2 billion in savings realized through the end of 2013 and ~$1 billion in productivity savings expected for 2014.
- Organic revenue grew 4.1% primarily reflecting effective net pricing. Reported net revenue grew 1%. Structural changes, principally the refranchising of the company's beverage operations in Vietnam, negatively impacted reported net revenue performance by 1%age point and foreign exchange translation had a 3-percentage-point unfavorable impact on reported net revenue in the quarter. Core constant currency operating profit rose 1% reflecting the impacts of revenue growth and productivity savings, offset by operating cost inflation, negative geographic mix and $56 million of incremental investments.
As a reflection of management's confidence in the company's strong and sustainable cash flow generation capacity, and consistent with its commitment to disciplined capital allocation, the company announced a 15% increase in its annualized dividend to $2.62 per share from $2.27 per share, to take effect with the June 2014 payment. The increase will be the 42nd consecutive annual increase in dividends per share. It also anticipates increasing share repurchases in 2014 to ~$5 billion. Combined, these programs are expected to return a total of $8.7 billion to shareholders in 2014, a 35% increase from 2013 levels.
The co announced a new 5-year, $5 billion productivity program (2015-2019). The savings are expected to come from accelerating investment in manufacturing automation, further optimizing the company's global manufacturing footprint, including closing of certain manufacturing facilities, re-engineering go-to-market systems in developed markets, expanding shared services and implementing simplified organization structures to drive efficiency. As a result of these actions, it expects to sustain ~$1 billion in annual productivity savings through 2019. The extended targets reflect a continuation of the benefits of the investments made and actions taken in recent years by the company to harmonize processes and systems and to drive greater global coordination across its businesses. The company remains on track to achieve its previously announced 3-year, $3 billion productivity target for 2012-2014, with ~$2 billion in savings realized through the end of 2013 and ~$1 billion in productivity savings expected for 2014.