PepsiCo moves to profit in 4Q, sees tax benefit
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.
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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