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PepsiCo beats by $0.10, reports revs in-line; slightly increases FY17 EPS guidance, continues to see organic revenue growth of at least 3%
- Reports Q2 (Jun) earnings of $1.50 per share, $0.10 better than the Capital IQ Consensus of $1.40; revenues rose 2.0% year/year to $15.71 bln vs the $15.57 bln Capital IQ Consensus.
- Reported net revenue increased 2.0 percent. Foreign exchange translation had a 1.5-percentage-point unfavorable impact on reported net revenue. Organic revenue, which excludes the impacts of foreign exchange translation and structural changes, grew 3.1 percent.
- Reported gross margin contracted 55 basis points and core gross margin contracted 5 basis points. Reported operating margin contracted 20 basis points and core operating margin expanded 50 basis points, both of which reflect a gain associated with the sale of our minority stake in Britvic plc (the Britvic gain). The Britvic gain positively impacted reported and core operating margin by 60 basis points.
- Co updates guidance for FY17, sees EPS of $5.13 (Prior $5.09) vs. $5.14 Capital IQ Consensus Estimate.
- Consistent with its previous guidance for 2017, the Company expects organic revenue growth of at least 3 percent. Based on current market consensus rates, foreign exchange translation is expected to negatively impact reported net revenue growth by approximately 2 percentage points and the 53rd week in 2016 is expected to negatively impact reported net revenue growth by 1 percentage point. Based on current market consensus rates, foreign exchange is now expected to negatively impact core EPS by approximately 2 percentage points (previously 3 percentage points). In addition, the Company intends to reinvest the Britvic gain in the balance of the year.