PepsiCo Beats Expectations in Q4 Earnings Report Sees Small Stock Bump in Pre-Market Trading

By Thomas Price Thursday, February 11, 2021

One of the few areas of business to remain mostly unaffected by the COVID-19 pandemic has been the snacks and beverages industry, which are generally purchased outside of restaurants. This was certainly the case for PepsiCo who posted their Q4 earnings report ahead of the opening of the stock market this Thursday.

The company continued to see its sales and revenue trend upward, beating out Wall Street expectations by strong margins. While the business still saw profits decrease in certain regions, the major takeaways remained extremely positive as new business in Africa, the Middle East, and Asia fueled strong numbers across the board. The release of the Q4 report has helped the company take in minimal gains in pre-market trading.

A Pepsi can.

PepsiCo — Earnings Beating Expectations

In the snack and beverage giant’s Q4 report, the company posted a strong $22.46 billion in net revenue. The figure represents a collective revenue growth of 8.8% for the business, beating out Wall Street expectations by nearly $1 billion. On top of this, PepsiCo outperformed analyst projections by $0.01 on earnings per share as well, reporting earnings of $1.47 per share.

The majority of the revenue from the company comes from North American beverage sales, growth in Africa, the Middle East, and South Asia, and the popularity of beverages such as Gatorade Zero, Bubly, and the line of Starbucks-branded coffee drinks. In fact, North American beverages saw operating profits grow by an impressive 19% as business maintained strong while the company cut marketing and commodity costs. However, the largest increase in profit came from the Africa, Middle East, and South Asia region, where the acquisition of Pioneer Food Group helped the company see an 80% boost in operating profit.

Other areas of profit growth for the business came from Quaker Foods North America as well as the Asia Pacific, Australia, New Zealand, and China region.

Stock Growth for PepsiCo and 2021 Guidance

After the release of the Q4 report by the company, PepsiCo shares have seen extremely modest growth in pre-market trading. The stock is currently priced at about $138 per share, representing an increase of slightly less than 0.3%. Optimism does remain high for the company going into 2021.

In fact, the company expects to see solid growth in revenue and earnings per share while remaining confident that business will continue to build steadily. This attitude has been expressed as well by Wall Street analysts who seem to be in line with the statements made by PepsiCo.

In a released statement accompanying the Q4 earnings results, CEO of the business, Ramon Laguarta, said, “We ended the year on a strong note with our global beverage business having accelerated while our global snacks and food business remained resilient in the fourth quarter. Our results were indicative of the strength and resilience of our highly dedicated employees, diversified portfolio, agile supply chain and go-to-market systems and strong marketplace execution even in the face of difficult COVID-19 challenges.”

About the Author

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Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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