PepsiCo Shares the Love: Strong Earnings Mean Bigger Dividends

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Shares of PepsiCo (NYSE:PEP) edged lower in early trading on Thursday after the food and beverage company reported fourth-quarter and full-year earnings. The results came in pretty much as expected by both analysts and PepsiCo management: the company reported decent organic revenue growth, decent earnings growth, and a strong increase in cash flow for the year as it moves forward with structural and strategic changes.

Pep OperOrganic revenue increased 4.1 percent on the year in the fourth-quarter, but net revenue increased just 1 percent. “Structural changes, principally the refranchising of the company’s beverage operations in Vietnam, negatively impacted reported net revenue performance by 1 percentage point,” PepsiCo commented in its earnings release, “and foreign exchange translation had a 3-percentage-point unfavorable impact on reported net revenue in the quarter.” Net revenue came in at $20.12 billion, edging out the mean analyst estimate by a fraction.

Revenues grew by the same scale for 2013 as a whole. Full-year organic revenue grew 4 percent on the back of effective net pricing. Net revenue increased 1 percent for the year, weathered by the same headwinds that eroded the fourth-quarter figure, falling at $66.42 billion, missing the mean analyst estimate by a fraction.

Net income increased 6 percent on the year in the fourth-quarter to $1.12 per diluted share, which beats the mean analyst estimate of $1.01 per share. Full-year earnings increased 10 percent to  $4.32 per share, or $4.37 per share after adjustments, which compares to the mean analyst estimate of $4.32 per share.

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