PepsiCo Inc. Earnings: Revenue Grows By Double-Digits

S&P 500 (NYSE:SPY) component PepsiCo Inc. (NYSE:PEP) reported its results for the fourth quarter. PepsiCo is a global company that manufactures a variety of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages, and foods.

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PepsiCo Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for PepsiCo Inc. rose to $1.42 billion (89 cents per share) vs. $1.36 billion (85 cents per share) in the same quarter a year earlier. This marks a rise of 3.7% from the year earlier quarter.

Revenue: Rose 11% to $20.16 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: PepsiCo Inc. reported adjusted net income of $1.15 per share. By that measure, the company beat the mean estimate of $1.13 per share. Analysts were expecting revenue of $19.91 billion.

Quoting Management: “In 2011, we delivered solid top- and bottom-line growth,” said PepsiCo Chairman and CEO Indra Nooyi.  “We continued to stimulate strong consumer demand for our products, and our successful pricing and productivity programs partially offset the impacts of inflation.  Importantly, in a year characterized by a challenging macroeconomic environment and political turbulence, we took advantage of gains from strategic adjustments to our portfolio to reinvest in key capabilities and markets.”

Key Stats:
PepsiCo has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 20.4%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 36.5% from the year earlier quarter.

PepsiCo has now seen net income rise in three straight quarters. In the third quarter, net income rose 4.1% and in the second quarter, the figure rose 17.6%.

Gross margin shrank 2.2 percentage points to 51.7%. The contraction appeared to be driven by increased costs, which rose 16.4% from the year earlier quarter while revenue rose 11%.

PepsiCo has now beaten estimates the last two quarters. In the third quarter, it topped expectations with net income of $1.31 versus a mean estimate of net income of $1.29 per share.

Looking Forward: Over the last 30 days, analysts have not been optimistic about the company’s next quarter performance. The average estimate for the first quarter of the next fiscal year is now 74 cents per share, down from 76 cents. At $4.39 per share, the average estimate for the fiscal year has fallen from $4.40 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com