PepsiCo (PEP) Stock Turns Red Despite Beating Expectations for Q4

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.

The diversity and popularity of its snack and beverage products helped PepsiCo to steer through the difficult operating environment created by the pandemic last year. The company on Thursday announced better-than-expected financial results for the fourth quarter.

PepsiCo reported an adjusted profit of $1.47 per share for the quarter, slightly up from $1.45 per share in the year-ago quarter, and just ahead of $1.46 per share forecasted by analysts. Revenue decreased 8.8 percent on a year-over-year basis to $22.46 billion but surpassed the analysts’ average estimate of $21.80 billion.

CEO Ramon Laguarta said in a statement, “Our results were 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 even in the face of difficult COVID-19 challenges.”

Looking forward, PepsiCo expects its organic revenue to grow in the mid-single-digits and its adjusted earnings in the high-single-digits during 2021 on a constant currency basis. Moreover, the company raised its annual dividend by 5 percent, effective June.

PepsiCo shares fell 1.98 percent to $134.97 on Thursday despite beating the analysts’ expectations for Q4. The stock has lost nearly 8 percent of its value over the past year, mainly due to the negative effects of the pandemic on its business.