Summary
PepsiCo, Inc. (PEP) filed an 8-K on September 4, 2012, providing an update on its 2012 financial guidance ahead of The Barclays Capital Back-to-School Consumer Conference. The company reiterated its expectation for a core constant currency earnings per share (EPS) decline of approximately 5 percent for fiscal year 2012, compared to its fiscal year 2011 core EPS of $4.40. This guidance anticipates an unfavorable foreign exchange translation impact of approximately three percentage points on full-year core EPS, based on then-current market consensus. The filing also clarified the definition of 'core' results, which exclude certain items such as commodity mark-to-market impacts, restructuring and impairment charges, and merger and integration charges. These exclusions are intended to provide a clearer view of ongoing operational performance. While the company provided detailed reconciliations for its 2011 core EPS, it noted an inability to reconcile future projected core constant currency EPS to reported results due to the unpredictability of foreign exchange rates and commodity prices.
Key Highlights
- 1PepsiCo reiterated its 2012 core constant currency EPS guidance, projecting a decline of approximately 5% from the 2011 core EPS of $4.40.
- 2Foreign exchange translation is expected to have an unfavorable impact of about 3 percentage points on full-year 2012 core EPS.
- 3The company provided a detailed reconciliation of its 2011 reported diluted EPS to its core diluted EPS of $4.40.
- 4Core results are defined as non-GAAP financial measures that exclude specific items like commodity mark-to-market net impact, restructuring and impairment charges, and merger/integration charges.
- 5The filing aims to provide investors with a clearer understanding of ongoing operational performance by excluding these non-recurring or volatile items.
- 6PepsiCo stated it cannot reconcile projected 2012 core constant currency EPS to reported results due to the unpredictability of foreign exchange rates and commodity prices.