PepsiCo(US:PEP) ZACKSยท2025-02-04 18:10Core Insights - PepsiCo reported strong fourth-quarter 2024 results with earnings exceeding the Zacks Consensus Estimate and showing year-over-year improvement, although the top line declined year over year due to weak demand in the convenient food business and product recall impacts [1][5]. Financial Performance - The core EPS for the fourth quarter was $1.96, surpassing the Zacks Consensus Estimate of $1.95, and reflecting a 10.1% increase year over year. In constant currency, core earnings improved by 14% [2]. - Reported EPS was $1.11, up 17% year over year, with foreign currency impacting EPS by 4% [2]. - Net revenues were $27.8 billion, a slight decline of 0.2% year over year, but above the Zacks Consensus Estimate of $27.9 billion [5]. - The reported gross profit decreased by 1% year over year to $14.6 billion, while core gross profit rose by 0.2% to $14.9 billion [9]. Segment Performance - The international business showed significant organic revenue growth of 6% year over year, with a core operating profit margin expansion of 260 basis points [3]. - Revenue growth was reported across most segments, with Europe up 6%, AMESA up 5%, and APAC up 2%, while FLNA and QFNA segments saw a 2% decline each, and Latin America experienced a 7% decline [13]. Operational Efficiency - Operating income rose to $2.3 billion, a 33.7% increase year over year, with core operating income growing 8.7% to $3.2 billion [10]. - The core operating margin expanded by 102 basis points, supported by strong international business performance and productivity initiatives [11]. Outlook - For 2025, PepsiCo anticipates low-single-digit organic revenue growth and mid-single-digit core constant-currency EPS growth, with currency headwinds expected to impact revenues and core EPS by 3 percentage points [16][17]. - The company plans to return $8.6 billion to shareholders in 2025, including $7.6 billion in dividends, and announced a 5% increase in the annualized dividend to $5.69 per share [18].