PepsiCo Inc forecast a surprise drop in full-year profit that was well below Wall Street estimates on Friday, hit by a stronger dollar, higher tax rate and increased investments in the business.
The company expects 2019 adjusted profit per share to drop 3% to $5.50, while analysts on average were expecting a 3.5% rise in profit to $5.86 per share, according to IBES data from Refinitiv.
Foreign exchange losses hurt reported net revenue performance, Chief Executive Officer Ramon Laguarta said in his maiden quarterly report.
Laguarta, however, said he expects the company to return to high-single-digit core constant currency earnings per share growth in 2020.
The company also posted fourth-quarter revenue and profit that was in line with expectations.
Sales at Pepsi's Frito-Lay division, the unit that makes Lay's potato chips and Doritos tortilla chips, rose 4% in the quarter.
Rival Coca-Cola Co also warned on Thursday that its earnings per share could fall in 2019, citing the strengthening dollar.