PepsiCo has pulled its financial guidance for the year as the US-based food and beverages giant said the coronavirus crisis has thrown up too many uncertainties to accurately predict the outlook.

The Frito-Lay and Walkers crisps owner made the announcement in conjunction with its first-quarter results to 21 March, with revenue up but both operating and net profits on a reported basis down.

On an adjusted basis, PepsiCo posted improved profitability. The company’s share price rose in early trading and was up 1.43% at US$136.38 at 15:06 ET.

Ramon Laguarta, PepsiCo’s chairman and chief executive, said today (28 April): “Despite a strong first quarter, there is still a great deal of uncertainty that exists in relation to Covid-19, including how geographies, retail channels and consumer behaviours will evolve over time. 

“Due to this uncertainty, the company’s previous financial outlook regarding fiscal year 2020 is no longer applicable. However, with a strong balance sheet, a highly cash generative business and ample liquidity, we believe we have adequate flexibility to meet the needs of our business and return cash to shareholders.” 

In February, PepsiCo predicted full-year organic growth of 4%, which was up 7.9% in the quarter completed in March, and an increase in earnings per share in constant-currency terms of 7%.

However, some of the firm’s estimates will remain in place, such as 21% core effective tax rate and cash returns to shareholders of around US$7.5bn – $5.5bn in dividends and $2bn in share repurchases.

First-quarter group revenues rose 7.7% to $13.9bn, with Frito-Lay North America up 7% at $4.07bn. Revenues for the Quaker Foods segment climbed 6.7% to $634m.

In Europe, PepsiCo’s revenues stood at $1.84bn versus $1.62bn in the same period a year earlier, while the same metric in Latin America rose to $1.31bn from $1.24bn.

Group operating profit dropped 5% to $1.9bn, while net income was down 4.9% at $1.35bn.

Adjusted for items including restructuring and impairment charges, PepsiCo said its “core” operating income was up 6.5% at $2.12bn, while its net income rose 9% to just under $1.5bn.

Looking back to the full-year outlook, PepsiCo said it expects a three to four percentage-point headwind from foreign-currency translations to “negatively impact reported net revenue and core EPS performance based on current market consensus rates”. 

PepsiCo said in March it expected to hire 6,000 new workers over the “coming months” to meet the extra retail demand from the Covid-19 outbreak as the business announced compensation packages for its US-based employees.