PepsiCo's Earnings Surprise

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PepsiCo
PEP
came out with strong numbers across the board in every sector for their first-quarter, showing a revenue growth of four percent and reported EPS of 77 cents on $12.58 billion over the 71 cent estimate on $12.53 billion that industry analysts had been expecting. PepsiCo's Chief Financial Officer Hugh F. Johnston appeared on CNBC's Squawk Box Thursday morning to discuss the company coming in at better-than-expected numbers for the first quarter. "If you look at the 12% EPS growth, the solid beat of six cents, we obviously feel good about that. Revenue growth of 4%, driven both by developed markets like our America's foods business as well as our Asian/Middle East/Africa business, which grew 15% led by China," said Johnson. The success was a reflection of PepsiCo's work over the past four to five years said Johnson. Some of which was placing their portfolio in new places, from developed countries to emerging ones. Globally, PepsiCo's snack and health foods, and their beverages, have made their mark. During the first quarter, PepsiCo showed 47 percent gains in snacks. "We've got a great portfolio in China ranging anywhere from our Lay's potato chip products right through to the Quaker business, where we have Quaker Congee, which is a local breakfast that we've made more convenient, and frankly as we build those business and roll them out, they're very, very popular and very successful in China," said Johnson. According to Johnson, another reason for PepsiCo's success is that they've taken some of the upsides that they've had in the past and reinvested it back into the company. "We would probably look to do that again in order just to extend the duration of the performance. We expect to see strong performance for some time to come," Johnson said.
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Posted In: CNBCEarningsNewsMediaCNBC Squawk BoxHugh F. Johnston
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