Pepsi beats market expectations despite beverages decline

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Pepsi's snacks business helped to offset weaker drinks performance (Source: Getty)

PepsiCo beat market expectations today as it unveiled a sparkling fourth quarter

The figures

The drinks and snacks maker delivered revenue of $19.53bn (£14.06bn), which was flat on the prior year but beat analyst predictions of $19.39bn.

Earnings per share also surpassed expectations at $1.31 rather than a consensus of $1.30.

The company was hit by one-off costs of $2.5bn relating to the changes in US tax, meaning it recorded a net loss of $710m, compared to earnings of $1.4bn in the previous year.

But the company said it also expected to benefit from tax changes this year, with more funds to be allocated to digital and ecommerce capabilities.

Read more: Here's the latest update on Britvic's Norwich factory closure

Why it's interesting

The company, which also makes household brands such as Tropicana and Quaker Oats, managed to keep revenue consistent despite a dip in its beverages business.

The North American beverages sector, which sells drinks such as Gatorade, recorded a three per cent decline in organic sales.

But snacks like Doritos helped to offset the decline.

In response to changing consumer trends, Pepsi has now begun to focus on healthier drinks, mirroring competitors which have sold more sugar-free and low-sugar options in the last few years.

Last year sugar-free Coke recipes sold as many bottles as regular Coke.

What PepsiCo said

“We are pleased with our performance for the fourth quarter and full year 2017. We met or exceeded most of the financial goals we set out at the beginning of the year. We delivered these results in the midst of a dynamic retail environment and rapidly shifting consumer landscape,” said chairman and CEO Indra Nooyi.

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