Pepsi Boosts Dividend After Earnings Beat

For the full year, Pepsi posted EPS of $4.37 on revenues of $66.15 billion, compared with EPS of $4.10 on revenues of $65.49 billion in 2012. The consensus estimates called for EPS of $4.34 on revenues of $66.47 billion.

Pepsi raised its annual dividend from $2.27 a share to $2.62, effective in June, and said it plans to repurchase approximately $5 billion in stock during 2014. The company said the combined effect of these programs will return about $8.7 billion to stockholders in 2014.

In its outlook, Pepsi expects to grow adjusted EPS by 7% in 2014, which translates to EPS of $4.68, a penny below the current consensus estimate. The company also expects organic revenue growth in the mid-single digits and productivity savings of $1 billion. Pepsi expects commodity price inflation in the low single-digit range for 2014.

The company’s CEO said:

We met or exceeded our organic revenue, cash flow, productivity, and core operating margin, constant currency EPS, and net ROIC targets and, at the same time, continued to invest in our brands, innovation and execution to strengthen the long-term health of our business. We look ahead to 2014 with confidence that our business is positioned to continue to perform well and to generate attractive returns for our shareholders.

In its three North American divisions, organic revenue rose 7% on a constant currency basis in the Frito Lay group, dropped 15% in the Quaker Foods group and rose 12% in the Americas Beverages group. Revenues in Europe fell 8% and rose 48% in the Asia, Middle East and Africa region. Overall revenues rose 1% year-over-year.

PepsiCo shares were down about 0.6% in premarket trading, at $81.00 in a 52-week range of $71.50 to $87.06. Thomson Reuters had a consensus analyst price target of around $91.00 before this report.