Revenue Increases at PepsiCo, but Impact of Currency Remains

On Wednesday, PepsiCo posted growth in revenue and volume but said a strong U.S. dollar had hurt its international results.

CEO Indra Nooyi announced that the company was expecting challenges from the global economy to continue during 2017.

Shares of PepsiCo were up 0.1% during trading before the opening bell on Wednesday as profit exceeded expectations on Wall Street.

On an overall organic basis, which eliminates impact from fluctuations in currency, acquisitions and one additional week of sales, revenue was up by 3.7% for the just ended quarter.

Volumes were higher across the units of the company but the strong dollar dented results internationally and caused what was paid for raw goods abroad to cost more.

The company, based in Purchase, New York, generates much of its overall sales outside the U.S. with products such as juice, soda and potato chips.

Despite headwinds with currency, PepsiCo posted growth in Latin America of 9%, with an increase of 4% in volumes of snacks that offset a decline of 3% in volumes of beverages.

The company said organic growth was 5% in its European Sub Saharan Africa as well as its Middle East, North Africa and Asia division.

Frito-Lay group in North America had organic growth of 3% as its beverages unit grew 2%. Quaker Foods ended the quarter flat.

In all, its Snack organic volumes were up 3% as its volumes of beverages were higher by 1%.

PepsiCo announced that it is expecting per share earnings for 2017 to reach $5.08 with growth in organic revenue of a minimum of 3%. Analysts were expecting 2017 per share earnings to be $5.16.

In all, during the fourth quarter, PepsiCo profit was down ending at $1.4 billion equal to 97 cents per share compared to $1.72 billion equal to $1.17 per share for the same period one year ago, due to a provision for income taxes and interest expense.

With adjustments, earnings were $1.20 per share or 4 cents higher than Wall Street expectations.

Revenue increased at PepsiCo by 5% to end the quarter at $19.51 billion. Analysts were expecting revenue to be $19.5 billion’

Many soft drink makers have faced big problems with sales of sugary drinks as consumers shift their drinking habits to beverages they consider to be healthier. That has caused beverage makers to find new alternatives for the consumer.

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