PepsiCo moves to profit in 4Q, sees tax benefit

FILE- In this May 7, 2018, file photo a delivery man unloads cases of soft drinks from a Pepsi truck in New York. PepsiCo Inc. reports earns on Friday, Feb. 15, 2019. (AP Photo/Mark Lennihan, File)

PURCHASE, N.Y. (AP) — PepsiCo moved to a profit in its fourth quarter, getting a boost from a large tax benefit as sales in its Frito-Lay unit North America strengthened.

Shares rose $2.36, or 2.1 percent, to $114.95 in Friday morning trading.

The food and beverage company recorded a $5.3 billion tax benefit in the quarter, which included reorganizing its international operations. A year earlier it had a tax expense of $2.5 billion.

PepsiCo Inc. earned $6.85 billion, or $4.83 per share, for the period ended Dec. 29. The Purchase, New York-based company lost $710 million, or 50 cents per share, in the prior-year period.

Adjusted earnings were $1.49 per share, matching the expectations of analysts surveyed by Zacks Investment Research.

Revenue was basically flat at $19.52 billion, edging out Wall Street’s forecast of $19.51 billion. Frito-Lay North America posted a 4 percent revenue gain, while the North America beverages segment reported a 2 percent increase.

PepsiCo expects 2019 organic revenue — or revenue before acquisitions — to grow 4 percent, with earnings of $5.50 per share. Analysts polled by FactSet predict $5.85 per share.

The company’s forecast comes a day after rival Coca-Cola provided a weak annual outlook that overshadowed its solid quarterly performance.

PepsiCo said it’ll save at least $1 billion a year through 2023 through some restructuring efforts. It anticipates about $2.5 billion in pretax charges related to the restructuring actions.

The company also announced an increase of 3 percent in its dividend, starting with the payout in June.


Portions of this story were generated by Automated Insights (http://automatedinsights.com/ap ) using data from Zacks Investment Research. Access a Zacks stock report on PEP at https://www.zacks.com/ap/PEP

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