PepsiCo Stock Rises Despite Higher Inflation Costs and Palantir Rallies After Acquiring Army Contract
PepsiCo posted stronger-than-expected third quarter earnings on Tuesday and raised its annual revenue forecast as the easing of pandemic restrictions boosts sales at restaurants and movie theaters.
The snack and beverage giant beat estimates by 6 cents a share, with quarterly earnings of $1.79 per share.
During the third quarter, Pepsi saw higher costs tied to inflation for labor, commodities, and transportation, particularly for its Quaker Food North America business unit.
PepsiCo CFO, Hugh Johnston, is expecting another round of price hikes on the company’s snacks and beverages early next year.
“I expect we’ll probably see a little bit more pricing increases in the first quarter of next year as we deal with the fact that input costs are just higher,” Johnston said Tuesday on CNBC’s “Squawk Box.” “That’s just the reality for us and everybody else.”
Our strong year-to-date results demonstrate that the investments we have made toward becoming a Faster, Stronger, and Better company are working,” said CEO Ramon Laguarta.
With a purpose to become a more transparent and sustainability-focused business, PepsiCo recently launched the pep+ initiative. The effort includes goals such as achieving net-zero emissions by 2040, evolving the portfolio into plant-based proteins, and slashing the use of nonrenewable plastic.
Group revenues, PepsiCo said, rose 11.6% to $20.19 billion, again topping analysts’ forecasts of $19.39 billion. Beverage’s revenues in North America were up 7% from last year, PepsiCo said, and 27% in Latin America. Frito Lay sales rose 6%, the company said.
In late trading Tuesday, Palantir Technologies stock is up 13.4% to $26.32.
Palantir Technologies stock rallied after acquiring an $823 million Army contract to deliver its intelligence data fabric and analytics foundation to modernize Army intelligence.
This capability will field modern data integration, correlation, fusion, and analytic capabilities that prepare the Army for the next fight against emerging near peer threats.
The Gotham platform provides an operating system for defense decision making and is specifically designed to connect the dots between disparate sources, according to the statement. The Army intelligence community will use this capability to modernize their data foundation by migrating legacy programs to Capability Drop 2.
“We look forward to the continued partnership with and the Army’s Intelligence Community in providing new and exciting technology that help them in their modernization efforts,” said Doug Philippone, Palantir’s global defense lead, in a statement.
Shares of Palantir are up 134% over this past year.
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