PepsiCo (PEP) Tops Q1 EPS by 5c, Reaffirms FY Guidance

PepsiCo (NASDAQ: PEP) reported Q1 EPS of $0.97, $0.05 better than the analyst estimate of $0.92. Revenue for the quarter came in at $12.88 million versus the consensus estimate of $12.69 million.

2019 Guidance and Outlook
The Company provides guidance on a non-GAAP basis as the Company cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange translation and mark-to-market impacts.
Consistent with its previous guidance for 2019, the Company continues to expect:

• Full-year organic revenue growth to be 4 percent.

• A core effective tax rate of approximately 21 percent.

• A decline in core constant currency EPS of approximately 1 percent, which incorporates lapping a number of 2018 strategic asset-sale and refranchising gains, the expected increased core effective tax rate, and expected 2019 incremental investments to strengthen the business.

• Approximately $9 billion in cash from operating activities and free cash flow of approximately $5 billion, which assumes net capital spending of approximately $4.5 billion.

• Total cash returns to shareholders of approximately $8 billion, comprised of dividends of approximately $5 billion and share repurchases of approximately $3 billion.

Applying current market consensus rates implies a 2-percentage-point foreign exchange translation headwind to both reported net revenue and EPS performance. This assumption and the guidance above implies 2019 core earnings per share of $5.50, a 3 percent decrease compared to 2018 core earnings per share of $5.66.

For earnings history and earnings-related data on PepsiCo (PEP) click here.

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