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 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 analysts
estimates, citing a strong dollar and the exclusion of its
Venezuelan business from its financial statements.
Revenue from PepsiCo's North American beverages business, which the
company started breaking out from the third quarter, rose 2 percent
in the fourth quarter ended Dec. 26, accounting for 31.5 percent of
total revenue.
PepsiCo has been introducing beverages with less sugar and more
natural ingredients as consumers in North America, its biggest
market, become more calorie-conscious and opt for products that are
perceived to be healthier.
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> ready-to-drink coffee,
which Pepsi distributes.
Traditional rival Coca-Cola Co <KO.N> reported better-than-expected
quarterly revenue and profit on Tuesday, helped by sales of smaller
cans and bottles, aggressive cost-cutting and lower commodity costs.
Revenue from PepsiCo's snacks business, which includes Frito-lay and
Doritos chips, also rose 2 percent in North America.
Frito-Lay North America and the North America beverage business were
the only two units to report higher revenue in the quarter.
Net income attributable to PepsiCo rose to $1.72 billion, or $1.17
per share in the period, from $1.31 billion, or 87 cents per share,
a year earlier.
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Excluding items, the company earned $1.06 per share.
Net revenue fell 7 percent to $18.59 billion.
Analysts on average had expected earnings of $1.06 per share on net
revenue of $18.51 billion, according to Thomson Reuters I/B/E/S.
PepsiCo forecast 2016 adjusted earnings of $4.66 per share, short of
the average analyst estimate of $4.76.
The company said it expected 2016 organic revenue growth of about 4
percent. It said foreign exchange translation would likely
negatively impact reported net revenue growth by 4 percentage
points.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Sriraj
Kalluvila and Ted Kerr)
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