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Stocks in focus: Coca-Cola, PepsiCo, Mattel

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Yahoo Finance's Ines Ferre breaks down quarterly earnings and the outlook for price increases for Coca-Cola, Pepsi, and Mattel.

Video Transcript

BRIAN CHEUNG: All right, well, let's switch gears now to some trending tickers. Obviously, a lot of companies having reported earnings, so Yahoo Finance's Ines Ferre has been on the case following all of them. Ines, give us the update on what are the big movers on this Thursday.

INES FERRE: Yeah, the big movers that we're watching are PepsiCo and also Coca-Cola after the companies announced their quarterly results. And bottom line for these companies is that you will be expecting to see price increases but they are treading carefully around these increases. So let's show you what the results are. Let's first start with PepsiCo, with its adjusted earnings per share coming in at $1.53, its revenue coming in better than expected. Organic sales are expected to rise 6% this year.

Hugh Johnson, PepsiCo CFO, spoke to Julie Hyman and Brian Sozzi earlier this morning, saying that with levels of inflation in commodities, we will have to raise prices. You'll see pricing up a bit. We're in a place where we should be able to keep our margins well intact for the year.

Moving on to Coca-Cola, you'll see the results there on your screen, with adjusted earnings per share coming in at $0.45. That beat Street estimates. Its revenue also beat Street estimates. CEO James Quincey said that the next phase of the price increases will be harder. And he said during the earnings call, while it's easy to respond to inflation by putting up the prices, there is clearly, as there is broad-based inflation, going to be a squeeze on real incomes in a number of countries. He said we do not want to lose customers.

But overall, when you're talking about these companies, they are seeing costs of input-- input costs going up. They are seeing the cost of commodities rising. Their operating costs are going up. Transportation is going up. So they are expecting to increase prices. But they are treading carefully around those.

BRIAN CHEUNG: Ines, as a quick follow-up--


BRIAN CHEUNG: Oh, I just wanted to quickly highlight Mattel. Shares are up almost 10%. Do you have any commentary on kind of what they reported earlier?

INES FERRE: Yeah, so Mattel beat on the top and the bottom line for its latest quarter. And in fact, those shares are up and are set to close at their highest level since April 2017. The company said its turnaround is complete. It's now in growth mode. And you have some positive commentary from analysts, BMO Capital saying that the outlook for 2022 and 2023 was confident and robust. And Mattel's CEO, Ynon Kreiz, he spoke to Brian Sozzi earlier this morning. He said as for inflation, as for prices, inflation is a factor, but the items, toys, are accessible. Take a listen.

YNON KREIZ: We did raise prices in the third quarter of last year. And it is one of the options we consider, given these times of inflation. But when we raise prices, we always keep consumers in mind. We are being very thoughtful and are committed to maintaining the highest quality and the best value for consumers.

INES FERRE: And he said that demand for toys, yes, COVID has played a part in this, but the industry has been growing over the last 10 years. And he expects it to continue growing beyond COVID, that people will continue to prioritize their children. And they will continue to be buying toys for children. And even if prices go up a bit, those prices are still accessible.

AKIKO FUJITA: Ines Ferre, thanks so much for breaking that down for us.