PepsiCo (PEP) 2021 Q1 Earnings Report Analysis

PepsiCo Inc. (NASDAQ:PEP) was officially founded in 1920 but its actual history began in 1893 when pharmacist Caleb Bradham developed a drink he called Brad’s Drink, which was later renamed Pepsi. The name Pepsi was motivated by the pepsin enzyme, which according to Bradham helped with the digestion process. Pepsi grew in popularity over the years and become a top soft drink brand in the world. The company added several other beverage and snack brands to diversify its portfolio. Today, it is a leading multinational food and beverage company with a market value hovering around $198 billion.

The company recently announced better-than-expected financial results for the first quarter despite mixed demand across international markets and weather-related hurdles in the United States. PepsiCo reported earnings of $1.71 billion, or $1.21 per share for the three months ended March 20, up from $1.34 billion, or 96 cents per share in the comparable period of 2020.

Excluding certain items, PepsiCo reported adjusted earnings of $1.21 per share that easily surpassed the consensus forecast of $1.12 per share. Revenue came in at $14.82 billion, up 6.8 percent from the year-ago quarter. Analysts on average were looking for revenue of $14.55 billion.

If we look at the performance of key units in the quarter, revenue at the Frito-Lay North America segment increased 4 percent, revenue from the North American beverage business rose 5 percent, while revenue at the Quaker Foods North America segment inched up 2 percent.

Commenting on the performance, CEO Ramon Laguarta said in a statement, “Our results are indicative of the strength and resilience of our highly dedicated employees, diversified portfolio, agile supply chain and go-to-market systems and strong marketplace execution. And we remain fully committed to executing against our key set of priorities to become a Faster, Stronger and Better organization and win in the marketplace. Following our first quarter results, we have greater confidence in delivering on our financial guidance for the full year.”

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