PURCHASE, New York (AP) — Soda and snack maker PepsiCo said Thursday that its fourth-quarter net income climbed 5 percent, helped by higher prices and improved volumes.
The company, which owns Gatorade, Quaker Oats and other products, also announced a five-year, $5 billion cost-savings program.
PepsiCo Inc.'s annual dividend will be raised by 15 percent, starting in June. It also plans to boost its 2014 share repurchases to about $5 billion.
For the period ended Dec. 28, the company earned $1.74 billion, or $1.12 per share. That compares with $1.66 billion, or $1.06 per share, a year ago.
Excluding charges and other items, earnings were $1.05 per share. Analysts surveyed by FactSet expected $1 per share, on average.
Revenue rose 1 percent to $20.12 billion. Wall Street was looking for revenue of $20.1 billion.
Revenue increased across most segments.
The North American beverage division reported a 2 percent decline in revenue, hurt by unfavorable foreign currency translation. PepsiCo said that after a review it has decided to keep the unit in its current structure within the company.
PepsiCo's North American drinks division has perennially played second fiddle to the world's No. 1 beverage maker, Coca-Cola.
In Asia, the Middle East and Africa, quarterly revenue dipped 1 percent due to the refranchising of bottling operations in Vietnam and unfavorable foreign currency translation.
For the year, PepsiCo earned $6.74 billion, or $4.32 per share. In the prior year it earned $6.18 billion, or $3.92 per share. Adjusted earnings were $4.37 per share.
Annual revenue climbed 1 percent to $66.42 billion from $65.49 billion.
PepsiCo said its $5 billion in savings through 2019 is expected to come from actions such as speeding up investments in automated manufacturing, closing certain manufacturing plants and expanding shared services.
The company said it is still on pace to achieve its previously announced three-year, $3 billion cost savings for 2012 through 2014. Approximately $2 billion in savings was realized through 2013's end and about $1 billion in savings are expected for 2014.
PepsiCo said it will increase its annual dividend by 15 percent to $2.62 per share from $2.27 per share.
The company said that the dividend and its stock buybacks will result in $8.7 billion in cash returns to shareholders in 2014. This is a 35 percent increase from 2013.
PepsiCo's stock shed 49 cents to $81 in premarket trading about an hour ahead of the market opening.
Original headline: PepsiCo 4Q performance tops Street, hikes dividend
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