Summary
PepsiCo, Inc. (PEP) issued this Form 8-K on May 10, 2012, to update investors on financial guidance and long-term targets. The company reiterated its expectation for core constant currency earnings per share (EPS) to decrease by 5% in 2012, with foreign exchange translation projected to have an unfavorable impact of approximately 2 percentage points. This guidance reflects a transition year for the company. In addition to the EPS outlook, PepsiCo reaffirmed its strong cash flow generation targets for 2012, aiming for nearly $8 billion in operating cash flow and over $6 billion in management operating cash flow (excluding certain items). The company also anticipates significant shareholder returns through share repurchases of over $3 billion and dividend payments of $3.3 billion in 2012. Looking ahead, PepsiCo maintained its long-term targets of mid-single-digit constant currency net revenue growth and high-single-digit core constant currency EPS growth.
Key Highlights
- 1PepsiCo expects core constant currency EPS to decrease by 5% in 2012.
- 2Foreign exchange translation is expected to negatively impact 2012 full-year core EPS by approximately 2%.
- 3The company is targeting nearly $8 billion in cash flow from operating activities for 2012.
- 4Management operating cash flow (excluding certain items) is targeted at over $6 billion for 2012.
- 5PepsiCo anticipates more than $3 billion in share repurchases for 2012.
- 6Dividend payments are expected to be $3.3 billion in 2012.
- 7Long-term targets include mid-single-digit constant currency net revenue growth and high-single-digit core constant currency EPS growth.