PepsiCo's profit beats estimates, but Quaker recalls weigh on earnings
By Steve Gelsi
Stock down after Quaker Oats unit posts a loss on product recalls.
PepsiCo Inc.'s stock fell 2.3% on Tuesday after the soft drink and salty snack giant beat Wall Street's first-quarter profit and revenue estimates but said its Quaker Oats unit swung to a loss on product recalls.
Pepsi's (PEP) Chief Executive Ramon Laguarta said the company faced the impact at Quaker Oats as well as a "difficult" revenue-growth comparison from the year-ago period, but overall its business "remained agile and performed well" - particularly in its international units.
Pepsi also reiterated its 2024 profit outlook, but said its adjusted earnings for the year could fall slightly short of forecasts.
PepsiCo said its earnings for the three months ending March 23 rose to $2.04 billion, or $1.48 a share, from $1.93 billion, or $1.40 a share in the year-ago period.
Adjusted earnings were $1.61 a share, ahead of the FactSet consensus estimate of $1.52 a share.
First-quarter revenue rose to $18.25 billion from $17.85 billion, above the analyst estimate of $18.08 billion.
Looking ahead, Pepsi expects 2024 adjusted earnings of at least $8.15 a share, a penny below the consensus estimate of $8.16 per share.
Pepsi initially announced the voluntary recall of Quaker Oats Chewy Bars and Simply Granola serials in December, due to concerns over potential salmonella.
In January, Pepsi added two dozen additional types of granola bars, cereals and snack foods to the recall over possible salmonella contamination.
On Tuesday, Pepsi said its Quaker Oats unit swung to a loss of $49 million from a year-ago profit of $188 million.
Revenue at Quaker Oats fell to $593 million from $777 million in the year-ago period.
Ahead of Tuesday's trades, Pepsi's stock was up by 3.9% in 2024, compared to a 5.1% gain by the S&P 500 SPX.
-Steve Gelsi
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
04-23-24 0950ET
Copyright (c) 2024 Dow Jones & Company, Inc.-
These Stocks Are (Still) Powering the Bull Market
-
5 Undervalued Energy Stocks to Play the AI Data Center Demand Boom
-
After Earnings, Is Lowe’s Stock a Buy, Sell, or Fairly Valued?
-
5 Stocks With the Largest Fair Value Estimate Cuts After Q1 Earnings
-
10 Stocks With the Largest Fair Value Estimate Increases After Q1 Earnings
-
Markets Brief: Inflation Back in the Spotlight
-
AI Is Booming, but Consumer Spending Is Slowing. Which Will Prevail in the Stock Market?
-
What’s Happening In the Markets This Week
-
3 Dividend Stocks for June 2024
-
After Earnings, Is Alibaba Stock a Buy, Sell, or Fairly Valued?
-
MongoDB Earnings: Slashing Valuation as Execution and Macro to Blame for Lower Guidance
-
Marvell Earnings: We Raise Our Medium-Term AI Forecast and Bring Our Valuation Up to $75
-
Zscaler Earnings: Impressive Traction in Emerging Products Drives Sales Growth for the Quarter
-
Dell Earnings: Raising Valuation on Strong AI, but the Stock Remains Severely Overvalued
-
After Earnings, Is Nvidia Stock a Buy, Sell, or Fairly Valued?
-
The 10 Best Companies to Invest in Now