PepsiCo Inc shares gained 1.2% in premarket trading on Thursday morning after the company released its fourth-quarter financial results. The company beat analysts’ revenue and profit estimates, raising its annualized dividend by 10% to $5.06 per share as a result.
The major beverages company reported net revenue of about $28 billion for the period, thereby exceeding estimates of $26.84 billion. Adjusted earnings per share came to $1.67, higher than estimates of $1.65 per share.
At the core of PepsiCo’s improved financial performance was the company’s decision to hike up prices in an effort to handle inflation-induced rising costs. The company’s costs increase by 16% on average for the period, while its organic volume actually decreased by 2%.
Because of the company’s near duopoly with its closest rival Coca-Cola Co, PepsiCo was able to implement its price rises while receiving little pushback. Also driving the company’s sales performance was the strengthening dollar, thereby pushing up international revenue.
Quaker Oats proved to be one of the company’s weaker business units over the quarter, with its operating profit falling by about 3% to $188 million due to higher production costs.