10-QPeriod: Q1 FY2014

PEPSICO INC Quarterly Report for Q1 Ended Mar 22, 2014

Filed April 17, 2014For Securities:PEP

Summary

PepsiCo Inc.'s first quarter 2014 results, ending March 22, 2014, showed a modest increase in net revenue, growing slightly to $12.623 billion from $12.581 billion in the prior year period. Net income attributable to PepsiCo also saw a healthy rise, up 13% to $1.216 billion, translating to diluted earnings per share of $0.79, a 15% increase from $0.69 in the prior year. The company highlighted a significant restructuring and impairment charge of $96 million related to its new 2014 Productivity Plan, impacting profitability in the short term but aimed at long-term efficiency gains. Despite currency headwinds, particularly from the weakening Russian ruble and Venezuelan bolivar, PepsiCo demonstrated resilience in its divisional performance. Frito-Lay North America and Europe showed solid revenue and operating profit growth. However, PepsiCo Americas Beverages experienced a notable decline in operating profit, partly due to restructuring charges and challenging market conditions. The company also announced a 15% increase in its annualized dividend to $2.62 per share, signaling confidence in its financial health and commitment to returning capital to shareholders.

Financial Highlights

50 data points
Beta

Revenue

$12.62B

54.5% Gross Margin

Net Income

$1.22B

9.6% Net Margin

EPS (Diluted)

$0.79

Total Assets

$77.49B

Cash & Equivalents

$9.84B

Free Cash Flow

$181.00M

Financial Statements
Beta
Revenue$12.62B
Cost of Revenue$5.75B
Gross Profit$6.88B
SG&A Expenses$5.05B
Operating Income$1.81B
Interest Expense$201.00M
Net Income$1.22B
EPS (Basic)$0.80
EPS (Diluted)$0.79
Shares Outstanding (Basic)1.52B
Shares Outstanding (Diluted)1.54B

Key Highlights

  • 1Net revenue increased slightly by 0.3% to $12.623 billion for the 12 weeks ended March 22, 2014, compared to $12.581 billion in the prior year.
  • 2Net income attributable to PepsiCo increased 13% to $1.216 billion, with diluted EPS rising 15% to $0.79.
  • 3The company incurred $96 million in restructuring and impairment charges related to its new 2014 Productivity Plan.
  • 4Foreign currency fluctuations negatively impacted net revenue growth by 3 percentage points, primarily due to the depreciation of the Russian ruble and Venezuelan bolivar.
  • 5Operating profit for PepsiCo Americas Beverages decreased by 24% (7% excluding items affecting comparability), impacted by operating cost increases and commodity costs.
  • 6The company announced a 15% increase in its annualized dividend to $2.62 per share, effective June 2014.
  • 7Share repurchases totaled $1.249 billion for the quarter, indicating continued capital return to shareholders.

Frequently Asked Questions

PepsiCo reported a modest increase in net revenue, growing by 0.3% to $12.623 billion. Net income attributable to PepsiCo saw a more significant increase of 13% to $1.216 billion, resulting in diluted earnings per share of $0.79, up 15% from the prior year.

The company incurred $96 million in restructuring and impairment charges related to its newly announced 2014 Productivity Plan in the first quarter. While these charges impacted short-term profitability, they are part of a larger initiative to drive future efficiency and cost savings.

A significant challenge was the impact of foreign currency fluctuations, which reduced net revenue growth by 3 percentage points due to the depreciation of currencies like the Russian ruble and Venezuelan bolivar. Additionally, the PepsiCo Americas Beverages division experienced a substantial decrease in operating profit, partly due to cost pressures and specific market conditions.

PepsiCo demonstrated its commitment to shareholder returns by announcing a 15% increase in its annualized dividend to $2.62 per share. The company also continued its share repurchase program, repurchasing approximately $1.249 billion of common stock during the quarter.