PepsiCo Q4 organic revenue growth 5 percent
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Organic revenue grew 5 percent and reported net revenue declined 1 percent. Foreign exchange translation had a 6-percentage-point unfavorable impact on reported net revenue.
Core constant currency operating profit increased 7 percent.
During the fourth quarter, the company remeasured certain net monetary assets of its Venezuelan entities at the SICAD I auction-based rate of 12 bolivars per U.S. dollar versus the fixed exchange rate of 6.3 bolivars per U.S. dollar resulting in a $0.07 per share after-tax net charge reflected in our reported results. In addition, this change in exchange rate had an unfavorable impact on our core operating results.
Core gross margin and core operating margin expanded 70 basis points and 15 basis points, respectively, reflecting the implementation of effective revenue management strategies and productivity initiatives. Reported gross margin increased 60 basis points while reported operating margin decreased 175 basis points.
Core constant currency operating profit increased 7 percent. Results in the current year quarter reflect charges associated with efficiency initiatives, substantially offset by incremental investments in the prior year quarter. Reported operating profit decreased 15 percent and included the impact of restructuring and impairment charges, remeasurement of certain net monetary assets of our Venezuelan entities, a pension lump sum settlement charge and mark-to-market net losses on commodity hedges.
The company’s core effective tax rate was 25.5 percent, which compares to 28.2 percent in the prior-year quarter. The reported effective tax rate was 25.6 percent, above the prioryear quarter of 19 percent.
Core EPS was $1.12 and reported EPS was $0.87. Core EPS excludes a negative net impact of $0.08 per share from restructuring and impairment charges, $0.07 per share related to the remeasurement of certain net monetary assets of our Venezuelan entities, $0.06 per share related to a pension lump sum settlement charge and $0.04 per share related to mark-to-market net losses on commodity hedges.
Mark-to-market net gains and losses on commodity hedges are subsequently reflected in core division results when the divisions recognize the cost of the underlying commodity in operating profit. ■