PepsiCo cut its full-year earnings guidance, prompting a modest lift in its stock on Thursday as the market had anticipated the reduction. On the company's earnings call, CEO Ramón Laguarta said, "We don't feel good about the beverage business," a remark Yahoo Finance Executive Editor Brian Sozzi called a colossal red flag for the iconic global food and beverage company. The stock has declined steadily this year alongside other packaged food companies such as Campbell's, and the Street had expected an even deeper cut, making the actual reduction a source of relief. PepsiCo has promised deep cost cuts, with major layoffs expected at the company into year end, while healthier parts of the portfolio such as zero sugar drinks performed well in the most recent quarter. Sozzi said that to get PepsiCo shares working again, the company may need to explore a spin-off or sell-off of its snacks business and address the underperforming Quaker foods unit, and he expects earnings estimate cuts on PepsiCo over the next 24 to 48 hours.
PepsiCo IncPepsiCo cut its full-year earnings guidance and CEO flagged weakness in the beverage business, with further estimate cuts expected.
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