On Thursday, two of the world’s leading Cola producers, PepsiCo (NASDAQ: PEP) and Coca-Cola (NYSE: KO), warned of a rise in profits. This year due to unrelenting cost increases following a sharp rise in demand and rising prices.
Costs from aluminum cans to work and shipping have increased due to the disruption caused by the epidemic. The spread of the Omicron coronavirus Companies has responded with rising prices.
However, with costs still high and supply constraints showing no signs of slowing down, analysts have warned that inflation will not be enough to cover the profits of food producers fully. Coca-Cola shares rose after the beverage giant reported that revenue exceeded analysts’ expectations.
Coca-Cola (symbol: KO) reported a quarter-adjusted profit of 45 cents a share, exceeding the forecast of 41 cents, in sales of $ 9.5 billion, which is more than expected at $ 8.9 billion.
Annual revenue reached $ 2.32 billion in revenue of $ 38.7 billion, exceeding expectations of $ 2.29 billion in $ 38.1 billion.
Organic income increased by 9% for the quarter and 16% for the whole year. The company said that annual revenue growth was due to a 9% increase in fixed sales and a 6% increase/mix. Price/quarter mix increased by 10%.
PepsiCo (PEP) Competitor, which also reported wages on Thursday, dropped by 1%. The drink and snacks sent $ 1.53 billion in unchanged income to $ 25.3 billion, both higher than average.
Coca-Cola, the adjusted performance rate dropped to 22.1% in the fourth quarter, up 27.3% last year. PepsiCo’s adjusted base margin decreased by 183 points.
A significant company rival from Atlanta has expressed a similar view.
“Can it be completed this year? No, but we are doing our best to maximize our potential,” Coca-Cola Chief Executive Officer James Quincey telephoned the analyst.
The Coca-Cola performance rate dropped to 22.1% from 27.3% last year. PepsiCo’s adjusted margin decreased by 183 points.
“Even PepsiCo is in danger of being overtaken by costly services,” writes Barclay’s commentator Lauren Lieberman in her book.
PepsiCo expects a 2022 cash prize of $ 6.67 per share, below analysts’ expectations of $ 6.73, according to IBES data from Refinitiv. Coca-Cola predicts that fixed annual earnings per share will increase by 5% to 6% from $ 2.32 sent in 2021, compared to the 6% increase rates.
PepsiCo chief financial officer Hugh Johnston told Reuters that the company could raise prices over time if costs rose beyond expectations and would not reverse the shortfall in certain products.
“We manage our supply chain to the shelf. That puts us in an excellent position, but I can’t say we won’t have any challenges. We’re not safe from that,” Johnston said.
PepsiCo’s domestic production grew by 12.4% to $ 25.25 billion in the fourth quarter, exceeding $ 24.24 billion, while Coca-Cola adjustments increased by 10.1% to $ 9.47 billion, reaching higher levels. $ 8.96 billion. The stocks of the companies were down in the stock market.
Coca-Cola has warned that foreign exchange rates and commodity prices could disrupt next year’s operations, predicting interest rates of 3% to 4% on dividends per year and 5% on quarterly profits.
The fourth quarter was marked for the first time away from home consumption before 2019, especially in markets where Covid-19 uncertainty has declined. The company has benefited from the coronavirus epidemic’s gradual reopening of global trade. International unit cases are progressing quarterly, and the annual case rate has exceeded pre-2019 levels.
China, India, and Russia lead the growth of emerging markets, while the U.S., Mexico, and the U.K. lead developed markets.
PepsiCo on Thursday also announced a 7% annual budget increase and a new $ 10 billion stock purchase plan.
Edited by-Subbuthai Padma
Published by- Radhika N
