PepsiCo Inc. beat analysts’ expectations for revenue and profit in the fourth quarter on Thursday thanks in part to price increases the beverage company implemented to deal with rising costs.

The company also increased its annualized dividend by 10% to $5.06 per share, which caused a 1.3% increase in the stock price in premarket trading.

The Frito-Lay manufacturer did, however, predict annual profit below Wall Street expectations, indicating that multiple price increases would probably reduce demand for its sodas and snacks amid the cost-of-living crisis.

As it battles rising freight, commodity, and labor costs as well as the impact of a stronger dollar on international revenue, PepsiCo has raised prices over the last few quarters with little resistance thanks to its near duopoly in the market for carbonated beverages with Coca-Cola Co.

Quaker Foods North America, a division of PepsiCo, saw its operating profit for the fourth quarter drop by about 3% to $188 million as higher production costs reduced its margins.

According to data from Refinitiv, the company earned $1.67 per share on an adjusted basis, exceeding estimates of $1.65.

Compared to estimates of $26.84 billion, PepsiCo’s net revenue came in at about $28 billion.

While organic volume decreased 2%, the company’s average prices increased by 16%.

In contrast to estimates of $7.28, PepsiCo said it anticipates core constant currency earnings for fiscal 2023 of $7.20 per share.

According to a Refinitiv survey of analysts, the following discrepancy exists between what the company reported and what Wall Street was anticipating:

$1.67 adjusted earnings per share versus $1.65 anticipated

Revenue: $28 billion versus the anticipated $26.84 billion

The multinational food and beverage corporation reported fourth-quarter net income of $518 million, or 37 cents per share, compared to $1.32 billion, or 95 cents per share, in the same period last year.

Pepsi made $1.67 per share after deducting losses from the sale of its juice division, write-downs of its Russian assets, and other items.

Up 10.9% to $28 billion, net sales. In the third quarter, the company’s organic revenue, which excludes the effects of acquisitions and divestitures, increased 14.6%.

However, Pepsi saw a 2% volume decline across its global food business as consumers were hurt by price increases.

Pepsi anticipates a 6% increase in organic revenue and an 8% increase in its core constant currency earnings per share by the year 2023. Wall Street forecasts a 3.5% increase in net sales and a 7.3% increase in earnings per share.

(Adapted from Nasdaq.com)