Pepsi raises revenue outlook after earnings beat, but stock falls as beverage sales slow

PepsiCo on Tuesday raised its full-year forecast after its quarterly earnings and revenue topped analysts’ expectations, despite higher costs and snarls in the supply chain.

However, the company’s North American beverage unit saw its growth moderate during the quarter. Pepsi shares fell less than 1% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $1.79 adjusted vs. $1.73 expected
• Revenue: $20.19 billion vs. $19.39 billion expected

Pepsi reported fiscal third-quarter net income of $2.22 billion, or $1.60 per share, down from $2.29 billion, or $1.65 per share, a year earlier.

Excluding items, the food and beverage giant earned $1.79 per share, topping the $1.73 per share expected by analysts surveyed by Refinitiv.

Net sales rose 11.6% to $20.19 billion, beating expectations of $19.39 billion. The company’s organic revenue, which strips out the impact of acquisitions and divestitures, climbed 9% in the quarter.

Pepsi’s North American beverage business reported organic revenue growth of 7% for the quarter. While the unit’s organic sales have risen 10% on a two-year basis, growth has moderated since bouncing back 21% in the prior quarter.

For the full year, Pepsi said it expects its organic revenue to increase by 8%, up from its prior forecast of 6% growth. The company reiterated its forecast for core constant currency earnings per share of 11% growth.