Summary
PepsiCo Inc.'s Q1 2018 report shows a 4% increase in net revenue to $12.6 billion, driven primarily by volume growth and effective net pricing across its divisions, particularly in Latin America, ESSA, and AMENA. While operating profit saw a slight decrease of 3% to $1.8 billion due to increased operating costs, commodity inflation, and a one-time bonus related to the Tax Cuts and Jobs Act (TCJA), net income attributable to PepsiCo rose by 2% to $1.34 billion, resulting in diluted EPS of $0.94, a 3% increase year-over-year. The company also saw a favorable impact from foreign exchange rates, which contributed positively to net revenue growth in several international segments. Financially, PepsiCo ended the quarter with a strong cash position of $13.4 billion and increased its cash dividend by 15.2% in February 2018, signaling confidence in its future performance and commitment to returning capital to shareholders. The company continues to manage its productivity initiatives and global business transformation, while navigating the complexities of the TCJA and its provisional tax expense. Investors should note the impact of the TCJA on the tax rate and the company's ongoing evaluation of its financial implications.
Financial Highlights
50 data points| Revenue | $12.56B |
| Cost of Revenue | $5.66B |
| Gross Profit | $6.91B |
| SG&A Expenses | $5.10B |
| Operating Income | $1.81B |
| Interest Expense | $294.00M |
| Net Income | $1.34B |
| EPS (Basic) | $0.94 |
| EPS (Diluted) | $0.94 |
| Shares Outstanding (Basic) | 1.42B |
| Shares Outstanding (Diluted) | 1.43B |
Key Highlights
- 1Net revenue increased by 4% to $12.6 billion, driven by global volume growth and effective net pricing.
- 2Operating profit decreased by 3% to $1.8 billion, impacted by operating cost increases, commodity inflation, and a one-time bonus related to the TCJA.
- 3Net income attributable to PepsiCo rose by 2% to $1.34 billion, with diluted EPS increasing by 3% to $0.94.
- 4International segments, particularly Latin America, ESSA, and AMENA, showed strong net revenue growth (14%, 15%, and 7% respectively), aided by favorable foreign exchange.
- 5The company maintained a strong liquidity position with $13.4 billion in cash and cash equivalents.
- 6PepsiCo announced a 15.2% increase in its annualized dividend and significant share repurchase programs, signaling commitment to shareholder returns.
- 7The company is still evaluating the full financial impact of the Tax Cuts and Jobs Act (TCJA), including an expected additional provisional transition tax expense.