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An employee pours Pepsi from a soft drink pump behind the bar of a restaurant.
PepsiCo on Friday reported quarterly earnings and revenue that met analysts' expectations, but is forecasting weaker-than-expected earnings for 2019, like rival Coca-Cola.
The food and beverage giant is forecasting that it will earn $5.50 per share during 2019, down from its 2018 earnings per share of $5.66. Wall Street had expected the company to earn $5.86 in 2019, according to Refinitiv estimates.
Among other factors, PepsiCo called out an increased tax rate and currency headwinds as reasons for the weak outlook. Excluding currency fluctuations, it expects full-year earnings per share to decline by 1 percent. The company's earnings last year were also boosted by selling assets and lapping franchising costs.
The company also said in a statement that it plans to make 2019 "a year of substantial investment," including increasing merger and acquisition activity. In December, it completed its $3.2 billion acquisition of SodaStream, the at-home sparkling drink maker.
Shares of the company dropped less than 1 percent in premarket trading.
Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
Earnings per share: $1.49 vs. $1.49 expectedRevenue: $19.52 billion vs. $19.52 billion expectedThe company reported net sales of $19.52 billion, matching analysts' expectations and unchanged from a year earlier.
PepsiCo's once-struggling North American beverage business continued its comeback this quarter, seeing 2 percent organic growth. The company has been increasing its spending on marketing and advertising, particularly on its Pepsi and Mountain Dew sodas. It has also been investing in its higher-growth water and sports drinks segments, with brands like Gatorade Zero and Lifewtr.
Its snack business remained strong, with Frito-Lay North America delivering 4 percent organic revenue growth. The company said that it is continuing to add more nutritious snacking options.
PepsiCo reported fiscal fourth-quarter net income of $6.85 billion, or $4.83 per share, up from a loss of $710 million, or 50 cents per share, a year earlier.
Excluding merger and integration charges, net tax benefits and other items, PepsiCo earned $1.49 per share, in line with Wall Street's expectations.
The company also announced Friday that it is increasing its dividend by 3 percent, to $3.82 from $3.71, beginning in June.
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