Purchase / NY. (pci) PepsiCo Inc. reports first quarter 2017 results and reaffirms 2017 financial targets. “We achieved solid revenue growth in the first quarter underpinned by global volume growth and positive net price realization, despite challenging food and beverage industry trading conditions in North America and continued volatility in a number of developing and emerging markets», said Chairman and CEO Indra Nooyi. “Our first quarter results were in line with our expectations, and we are on track to achieve our financial objectives for 2017». Summary:
- Reported first quarter and year-ago results were impacted by restructuring charges in conjunction with the multi-year productivity plan the company publicly announced in 2014; and Commodity mark-to-market impacts.
- Reported year-ago results were impacted by a charge related to the transaction with Tingyi.
- Reported net revenue increased 1.6 percent. Foreign exchange translation had a 1-percentage-point unfavorable impact on reported net revenue. Organic revenue, which excludes the impacts of foreign exchange translation and structural changes, grew 2.1 percent.
- Reported and core gross margin contracted 45 basis points. Reported operating margin expanded 240 basis points and core operating margin contracted 30 basis points. Reported operating margin expansion reflects the impact of the year-ago charge related to the transaction with Tingyi.
- Reported operating profit increased 19 percent and core constant currency operating profit increased 1 percent. The impact of the charge related to the transaction with Tingyi in the prior year had a 23-percentage-point favorable impact on reported operating profit growth. Commodity mark-to-market adjustments reduced reported operating profit growth by 4 percentage points. Foreign exchange translation reduced reported operating profit growth by 1 percentage point.
- The reported effective tax rate was 22.7 percent in the first quarter of 2017 and 31.9 percent in the first quarter of 2016. The first quarter 2016 tax rate was impacted by the charge related to the transaction with Tingyi, which had no corresponding tax benefit. The core effective tax rate was 22.5 percent and 24.7 percent in the first quarter of 2017 and 2016, respectively. The first quarter 2017 reported and core tax rate reflects the positive impact of a change in the accounting for certain aspects of share-based payments to employees.
- Reported EPS was 0.91 USD, a 43 percent increase from the prior year period, primarily reflecting the impact of the year-ago charge related to the transaction with Tingyi. Foreign exchange translation reduced reported EPS growth by 2 percentage points.
- Core EPS was 0.94 USD, an increase of 5.5 percent. Excluding the impact of foreign exchange translation, core constant currency EPS increased 7 percent (see schedule A-10 for a reconciliation to reported EPS, the comparable GAAP measure).
- Net cash used in operating activities was 199 million USD.