PepsiCo on Tuesday delivered better-than-expected third-quarter earnings that showed signs of growing consumer demand for its teas, Gatorade, namesake cola and other beverages in North American.
announcing in August plans to buy at-home carbonated drink maker SodaStream for $3.2 billion. SodaStream helped create the market for in-home soda making, but in recent years has promoted the product as a tool to make carbonated water, accommodating for changing tastes. It therefore gives PepsiCo a further foothold into both water and at-home appliances.
The deal was also notable bite for PepsiCo, which has largely stuck to smaller size deals in recent years.
“I would interpret SodaStream as a unique business opportunity that was in front of us and not a change in M&A policy,” Johnston told CNBC.
As to speculation the company might refranchise its bottling business, following suit of rival Coca-Cola, Johnston said he “[didn’t] have any news to report.”
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Thomson Reuters:
- Adjusted earnings per share: $1.59, vs. $1.57 expected
- Revenue: $16.49 billion vs. $16.36 billion expected
Its stock was flat in premarket trading at $111.29 a share.
Pepsi reported fiscal third-quarter net income of $2.49 billion, or $1.75 per share, up 16 percent from $2.14 billion, or $1.48 per share a year earlier.
PepsiCo earned $1.59 per share on an adjusted basis, which strips out fluctuations in commodities prices, restructuring costs and some tax issues, beating the $1.57 per share expected by analysts surveyed by Thomson Reuters.
Net sales rose 1.5 percent to $16.49 billion, beating expectations of $16.36 billion.
PepsiCo said it expects revenue growth for the year of 3 percent. It also said that a strong dollar will negatively impact its fiscal year earnings by one percentage point. As result, it anticipates to earn $5.65 a share in fiscal 2018, up 8 percent from 2017.