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PepsiCo reported quarterly earnings that topped Wall Street’s expectations, but its revenue missed estimates.
The company’s net sales fell 0.5% in the fourth quarter.
PepsiCo executives said high borrowing costs and lower personal savings have squeezed consumers’ budgets.

Pepsi bottles are seen at the grocery store in Las Vegas, United States on November 17, 2023.
Jakub Porzycki | Nurphoto | Getty Images

PepsiCo on Friday reported mixed quarterly results as North American demand for its food and drinks weakened.
Shares of the company fell more than 2% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $1.78 adjusted vs. $1.72 expected
Revenue: $27.85 billion vs. $28.4 billion expected

Pepsi reported fourth-quarter net income of $1.3 billion, or 94 cents per share, up from $518 million, or 37 cents per share, a year earlier.
Excluding items, the food and beverage giant earned $1.78 per share.
Net sales dropped 0.5% to $27.85 billion. It’s the first quarter since 2020 that the company’s quarterly revenue has declined compared with the year-ago period. Currency exchange rates dragged net sales down by 1.5%.
Pepsi’s organic revenue, which excludes acquisitions and divestitures, rose 4.5% in the quarter, helped by higher prices. But those same raised prices have hurt demand for the company’s food and drinks. Pepsi’s volume, which strips out pricing and currency changes, slid again this quarter.

PepsiCo executives said high borrowing costs and lower personal savings have squeezed consumers’ budgets, particularly in North America, in prepared remarks released ahead of the company’s conference call. They also said consumers are increasingly choosing smaller pack sizes for convenience and their low price points.
Pepsi’s North American Quaker Foods division reported an 8% decline in volume. A voluntary recall of its granola bars and cereals hurt its sales during the quarter, along with weaker growth for the overall category.
Frito-Lay North America, which includes brands like Cheetos and Doritos, posted a 2% drop in volume.
Pepsi’s North American beverage unit saw its volume fall 6% in the quarter.
For 2024, Pepsi now anticipates organic revenue growth of at least 4% and core constant currency earnings per share growth of at least 8%. The company previously forecast organic revenue growth on the high end of 4% to 6% and core constant currency earnings per share growth in the high single digits.
“Consumers are likely to remain watchful with their budgets and choiceful with their purchases,” Pepsi executives said in the prepared remarks.
Pepsi is predicting a weaker first half of the year as product recalls dent its North American Quaker Oats business and international conflicts hurt sales in some regions. Executives are expecting international organic revenue growth to top that of North America for the full year. More

Local broadcast station groups plummeted in value this week after Disney, Warner Bros. Discovery and Fox announced they will be launching a new joint venture focused on sports fans.
The CEO of EW Scripps told CNBC that Wall Street is overestimating the new product’s popularity.
Local stations will be a part of the new product, Adam Symson told CNBC.

EW Scripps CEO Adam Symson
Source: EW Scripps

Local TV station owners including Sinclair, TEGNA and EW Scripps all saw their valuations plummet this week after Disney, Warner Bros. Discovery and Fox announced a new sports joint venture set to launch this fall.
Sinclair dropped 12% Wednesday, TEGNA fell 7.2% and Scripps plummeted 24% as investors weighed the meaning of a new, skinnier cable bundle of sports networks that will include ESPN, TNT and Fox but will leave out CBS and NBC. Sinclair bounced back by rising 7% Thursday, but TEGNA and Scripps were little changed.

But Wall Street’s reaction is overblown, according to EW Scripps CEO Adam Symson.
For one, investors appear to be pricing in that local ABC and Fox affiliates wouldn’t be part of the new skinnier bundle, Symson told CNBC in an interview. They will be included, he said, citing assurances he’s been given in conversations with Disney executives. Scripps owns 18 ABC stations, in markets such as Phoenix, Detroit, Cleveland and Tampa, and 4 Fox stations.
“Affiliates are going to be compensated for being carried along,” Symson said.
The joint venture will work collaboratively with all local broadcast affiliate partners in a similar manner to other digital multichannel bundlers, such as YouTube TV and Hulu with Live TV, according to a person familiar with the matter, who asked not to be named because the discussions are private.
This means consumers of the new bundle will be able to get their local news and sports from ABC and Fox.

A spokesperson for the joint venture declined to comment.

A partial buffet

Still, Paramount Global’s CBS and Comcast’s NBC are not part of the new bundle, putting affiliates of those broadcast stations potentially at risk.
But only if the bundle takes off. Which, according to Symson, is unlikely without those channels. Scripps has 9 CBS and 11 NBC stations.
“Wall Street acted like this was a sea change product,” Symson said. “I don’t take issue with the opportunity or the idea that there’s value here. But take March Madness. You’re only going to have access to TBS and TNT, but not CBS. It’s not the efficient bundle Wall Street is making it out to be.”
While one executive associated with the joint venture privately told CNBC it will be “a monster,” Symson disagreed with that premise, because, in his view, sports fans won’t be satisfied with a partial offering.
“People don’t want to go to a buffet where half the steam trays are missing,” Symson said.
FuboTV, another sports-focused bundle of networks, has yet to reach 2 million subscribers — and it offers more sports than the new bundle is likely.
A smaller bundle at a price of $40 or $50 per month probably won’t have a large audience either, said Symson.
“If you’re a sports nut today and you need access to all the live telecasts of your favorite sports, you’re best off maintaining the pay TV bundle as it is,” he said. “It calls into question the value of the consumer proposition.”
Even if Disney and Warner Bros. Discovery are able to juice subscriber additions by bundling the new service with existing streaming services Disney+, Hulu and Max, he noted the service should be viewed by investors as supportive of broadcast stations.
“If network affiliates like Scripps will be compensated for carriage on this platform like we are on other platforms, it’s potentially additive,” Symson said. “It’s just another product among products that are kind of already the same thing.”
WATCH: Disney CEO Bob Iger on new streaming sports partnership More

Hawaiian Airlines is rolling out complimentary Wi-Fi via SpaceX’s Starlink onboard commercial flights this week.
It is the first major U.S. airline to offer the satellite-based service.
“We think it is really going to set an entirely new standard for connectivity on airplanes,” Peter Ingram, CEO of Hawaiian Airlines, told CNBC.

A Hawaiian Airlines A321 aircraft with Starlink WiFi installed.
Hawaiian Airlines

Hawaiian Airlines is rolling out complimentary Wi-Fi via SpaceX’s Starlink on board commercial flights this week, the companies told CNBC, the first major U.S. airline to offer the satellite-based service.
“SpaceX has really cracked the code – literally, in terms of the technology – to be able to deliver a wide bandwidth of very high quality connectivity to an airplane with a global reach,” Peter Ingram, Hawaiian Airlines CEO, told CNBC.

Hawaiian’s plan for complimentary Wi-Fi comes as airlines ramp up their offerings for high-speed connectivity. JetBlue Airways offers Wi-Fi on board for free, and last year Delta Air Lines launched onboard internet free of charge for members of its loyalty program, after years of planning.
Hawaiian has an extensive network of flights over the Pacific Ocean, serving the mainland U.S., Japan, Australia and New Zealand, among other destinations, from Hawaii.

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“It really feels like an experience that should not be possible when you get on a commercial airline flight. And you’re able to connect to the internet and experience it in a way that’s similar, if not better, than what you can experience in your own home,” Chad Gibbs, SpaceX’s vice president of Starlink business operations, told CNBC.
“We now have a totally different paradigm, which is that we have incredible amounts of capacity and bandwidth that we can bring to the plane,” Gibbs added.
Hawaiian signed an agreement with SpaceX in April 2022, looking to utilize the Starlink network – which consists of more than 5,000 satellites in low Earth orbit and boasts more than 2.3 million customers worldwide. The airline didn’t previously offer inflight Wi-Fi.

A Starlink terminal installed on a Hawaiian Airlines aircraft.
Hawaiian Airlines

The companies did not disclose the deal’s value or how much it costs to install each of the aviation-specific Starlink terminals on a commercial aircraft.
Ingram emphasized, however, that “the costs of this have gone down from what the early Wi-Fi systems were.” He noted Hawaiian is “actively” installing Starlink terminals, with six completed on its Airbus A321 planes so far.
In total, Hawaiian expects to add Starlink to 18 of the A321 jets and 24 of its A330 aircraft later this year.
“We think it is really going to set an entirely new standard for connectivity on airplanes,” Ingram said.
The companies originally planned to begin installing the Starlink terminals last year, but Ingram said that SpaceX needed to launch more next-generation Starlink satellites and receive certification from the Federal Aviation Administration before installation could begin.
SpaceX has been steadily pursuing the licenses needed for a wide variety of aircraft. It’s received certification for smaller jets, with semi-private charter JSX beginning to use the service in late 2022.
“To date Starlink has been used on over 30,000 flights, on flights across the U.S. and around the world,” Gibbs said.
In addition to Hawaiian, SpaceX has announced Starlink inflight Wi-Fi deals with Latvia’s airBaltic, Japan’s Zipair and Qatar Airways.
The addition of Starlink service comes to Hawaiian shortly after the airline struck a deal late last year to be acquired by Alaska Airlines in a $1.9 billion deal.
— CNBC’s Leslie Josephs contributed to this report. More

The CEOs of Johnson & Johnson, Merck and Bristol Myers Squibb defended high drug prices in the U.S. at a Senate hearing.
J&J CEO Joaquin Duato, Merck CEO Robert Davis and Bristol Myers Squibb CEO Chris Boerner said their drug prices reflect the value of their drugs to patients and each company’s high investments in research and development, among others.
CEOs said they would welcome cheaper copycats of their drugs.
The push to cut drug prices is one of the rare hot-button issues that unites the two major political parties.

(L-R) Joaquin Duato, CEO of Johnson & Johnson, Robert Davis, CEO of Merck, and Chris Boerner, CEO of Bristol Myers Squibb, testify before the Senate Health, Education, Labor, and Pensions Committee at the Dirksen Senate Office Building on February 08, 2024 in Washington, DC. The Committee held to hearing to investigating the cost of prescription drugs. (Photo by Kevin Dietsch/Getty Images)
Kevin Dietsch | Getty Images News | Getty Images

The CEOs of Johnson & Johnson, Merck and Bristol Myers Squibb defended high drug prices in the U.S. at a Senate hearing Thursday, as the White House and lawmakers on both sides of the aisle work to rein in high health-care costs for Americans.
The push to cut drug prices is one of the rare hot-button issues that unites the two major political parties, though they often back different approaches to reducing costs.

The Senate Health, Education, Labor and Pensions Committee hearing comes at a pivotal time, as the Biden administration starts a long-awaited process to negotiate drug prices directly with manufacturers — which is expected to ease pressure on seniors’ wallets.
At the hearing, Merck CEO Robert Davis and Bristol Myers Squibb CEO Chris Boerner did not commit to cutting the prices of certain drugs in the U.S. to match the lower prices in other high-income countries, such as Canada and Japan.
But they said they would welcome cheaper copycats into the market when the main patents on each of their top-selling drugs expire. Drugmakers are notorious for using different strategies to extend the exclusivity of lucrative drugs.
J&J CEO Joaquin Duato also committed to lowering the price of its immunosuppressive medication Stelara in 2025, when competing drugs will be allowed to enter the market.
Roughly 9 million American adults did not take their drugs as prescribed in 2021 due to the high cost of medications, according to a federal survey. Prescription drug prices in the U.S. are more than 2.5 times as high as those in other high-income nations, another federal report showed.

The Senate panel said that’s especially true for some of the top drugs from the three drugmakers testifying Thursday, including Stelara, Merck’s immunotherapy drug Keytruda and Bristol Myers Squibb’s blood thinner Eliquis. Eliquis and Stelara are both among the first 10 drugs subject to the Medicare price talks.
“The overwhelming beneficiary of these high drug prices is the pharmaceutical industry,” Sen. Bernie Sanders, who chairs the Senate Health panel, said during the hearing.

Robert Davis, CEO of Merck, testifies before the Senate Health, Education, Labor, and Pensions Committee at the Dirksen Senate Office Building on February 08, 2024 in Washington, DC.
Kevin Dietsch | Getty Images News | Getty Images

The three CEOs acknowledged the high cost of health-care in the U.S, but said their prices reflect the value of their life-saving drugs to patients and the broader health-care system, along with their high investments in research and development.
They also claimed that medicines reach patients far faster in the U.S. than they do in other countries, and contended pharmacy benefit managers — middlemen who negotiate drug discounts on behalf of insurers and other payors — often pocket savings instead of passing them down to patients.
“Patients bear the brunt of a complex U.S. system that sees increasing health care costs and a lack of affordability. We have to make the system work better for them,” said Boerner, adding that drugmakers “have a role to play in addressing affordability.” 
But he added that Bristol Myers Squibb supports policies that “lower patient out-of-pocket costs without ultimately harming innovation.” Boerner did not point to specific policies.

Drugmakers want to protect innovation

Duato noted that J&J prices its drugs to meet its commitment to innovate and develop new medicines for patients, which requires a “massive” investment. J&J has spent nearly $78 billion in research and development since 2016, he said. 
Merck, for its part, invested $46 billion in R&D between 2011 to 2023, and expects to spend another $18 billion in the 2030s, Davis noted during his opening remarks. 
Meanwhile, Bristol Myers Squibb has spent more than $65 billion in R&D over the past decade, according to Boerner.
Still, a report released Tuesday by the committee said J&J and Bristol Myers Squibb each spent $3.2 billion more on stock buybacks, dividends and executive compensation than they did on R&D for finding new drugs in 2022. Merck, however, spent less on executive compensation than on R&D that year, the report said.
“I think most Americans would be pretty surprised, given how much the industry talks about research and development, that you are actually spending more money, shelling out money to investors and buying back stock than you are on research and development,” Sen. Chris Murphy, D-Conn., told the CEOs.
But Duato argued that paying dividends is how J&J remains operational and sustainable, which enables the company to develop medicines in the first place.

CEOs say medicines reach Americans faster

Senators highlighted the disparity between drug prices in the U.S. and in other high-income countries. For example, Sanders said the current annual cost of Eliquis is $7,100 in the U.S., but just $900 in Canada. 
He asked Boerner to commit to lowering the price of Eliquis in the U.S. to the drug’s price in Canada.

Bristol Myers Squibb CEO Chris Boerner testifies before a Senate Health, Education, Labor, and Pensions Committee hearing on high drug prices on Capitol Hill in Washington, U.S., February 8, 2024. REUTERS/Leah Millis
Leah Millis | Reuters

But Boerner said he could not make that commitment, primarily because the two countries have “different systems that prioritize very different things.” He noted that medicines in Canada are often harder to access and take considerably longer to reach patients in Canada than they do in the U.S.
Merck’s CEO offered a similar response after Sanders asked him to commit to lowering the price of Keytruda in the U.S. to its price in Japan. The panel said the current annual cost of Keytruda is $191,000 in the U.S., but significantly lower in Japan, at $44,000. 
“I think it’s also important to point out that the access [to drugs] in the United States is faster and more than anywhere in the world,” Davis said. 
He added that Keytruda has many more approved treatment uses in the U.S., which is partly why the price of the drug is higher than in other countries. 
Keytruda has 39 approved uses, or indications, across 17 cancer tumor types in the U.S., Davis said. That number is in the 20s in Europe and even lower in Japan, he added.
But those other indications often give a drug other patents, which allows companies to extend a medicine’s exclusivity on the market. Senators noted that Merck holds 64 active patents and 51 pending patents on Keytruda. 
Meanwhile, J&J currently has 15 active patents and 21 pending patents on Stelara. Bristol Myers Squibb holds 18 active patents and two pending patents on Eliquis.
“Pharmaceutical companies are doing everything that they can to keep their prices and their profit sky high….one way that companies do this is by filing dozens, even hundreds of frivolous patents that lock in their exclusive right to sell their drug for decades,” said Sen. Maggie Hassan, D-N.H.
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Kia is adding a hybrid model to its Carnival minivan to meet increasing consumer demand for the technology and assist in meeting federal fuel economy standards.
Hybrid vehicles typically include a traditional internal combustion engine combined with EV technologies such as an electric motor and small battery.
The Carnival hybrid is expected to go on sale alongside an updated version of the traditional minivan in the summer.

2025 Kia Carnival 

CHICAGO – Kia Motors is adding a hybrid model to its Carnival minivan to meet increasing consumer demand for the technology and assist in meeting tightening federal fuel economy standards.
Hybrids are a growing option for automakers as they strive to make vehicles more efficient and avoid costly federal fuel economy and emissions standards. They’re also less expensive and a less dramatic adjustment for consumers who want to go greener but aren’t ready to purchase all-electric vehicles.

EV sales have been slower than planned in the U.S. auto industry, though they’re expected to grow.
Hybrid vehicles typically include a traditional internal combustion engine combined with EV technologies such as an electric motor and small battery. They function like traditional vehicles and do not need to be plugged in like EVs or plug-in hybrid electric vehicles.
Kia America Vice President of Marketing Russell Wager told CNBC that adding the hybrid option for the Carnival was about giving customers choices. The South Korean automaker aims to have electrified models across its lineup.
“It’s just going to add a whole extra audience, because we didn’t have a hybrid,” Wager told CNBC.
The Carnival hybrid, announced at the Chicago Auto Show, is expected to go on sale alongside an updated version of the traditional minivan in the summer. Both models feature updated styling and interior technologies compared with the current model, which made waves in the family hauler segment for its SUV-inspired design when it was introduced in 2021.

2025 Kia Carnival interior 

Kia did not release pricing or fuel economy expectations for the new models. The current Carnival starts from about $33,000 to $47,000. With a 3.5-liter V6 engine, it achieves up to 20.6 miles per gallon combined city/highway, with a total range of 418 miles.
That V6 engine will continue to be offered alongside the 1.6-liter four-cylinder turbo-hybrid engine that produces 242 horsepower and 271 foot-pounds of torque, according to Kia.
Kia expects the hybrid model to account for half of the Carnival’s sales, according to the company.
It will be Kia’s fourth hybrid. The automaker also offers three plug-in hybrid electric vehicles.
Aside from the hybrid option, the updated minivan includes a redesigned front and back, including new lights and a larger, more open grille on the front of the vehicle. The updated interior includes Kia’s new infotainment system and other newer tech. It continues to offer “VIP lounge seating” with power controls and leg extensions, much like a traditional reclining chair.

2025 Kia Carnival “VIP lounge seating” with power controls and leg extensions much like a traditional reclining chair.

While the U.S. minivan segment is a far cry from its peak of roughly 1.5 million vehicles in the mid-1990s, some auto companies such as Hyundai and Chrysler remain in the category.
Kia parent Hyundai, which sold fewer than 44,000 Carnivals last year, achieved 14% market share of the roughly 305,500-unit minivan market last year in the U.S., according to auto data firm Motor Intelligence.
Chrysler was the segment leader last year with sales of its Pacifica minivan, including a plug-in hybrid electric version, at more than 120,550 units, or roughly 40% market share.
“We don’t like being where we are ranked in our market share,” Wager said. “We think we can compete with any of the others in the segment.”
Wager said the Carnival, which is imported from South Korea, is capacity constrained, meaning Kia could sell more in the U.S. if they could import more of the vehicles.
He said the company is increasing production capacity of the Carnival for the U.S.
The added capacity as well as additional production of other Kia models should assist the automaker in topping its record U.S. sales of 782,451 vehicles last year.
“Our goal is to sell more than we sold for last year’s record sales,” Wager said. More

Delta has struggled with overcrowding in its popular Sky Club lounges.
The carrier plans to open “premium” lounges in New York, Los Angeles and Boston this year.
The new tier of airport lounges is similar to a strategy that American and United have for international business-class travelers.

Delta’s new Sky Club airport lounge at New York’s John F. Kennedy International Airport.
Leslie Josephs/CNBC

Delta Air Lines’ popular airport lounges are getting a more exclusive tier, in the airline’s latest push to cater to high-spending travelers.
The first “premium” lounge is scheduled to open in June at New York’s John F. Kennedy International Airport, and at 38,000 square feet, it will be the largest of the carrier’s lounges, Delta said on Thursday. Other high-end Delta lounges will open in Boston and Los Angeles later this year.

Delta has been building up its network of Sky Clubs in recent years to cater to swarms of travelers as more people gain entry through memberships, airline status, credit card benefits or flying in a premium cabin. Last year, Delta said it would limit entry into its lounges in the coming years, but softened some changes after a customer uproar.
The new strategy shows Delta moving away from a one-size-fits-all approach for its airport travelers. The airline is joining United Airlines, which operates Polaris lounges, and American Airlines’ which has Flagship lounges, along with standard airport clubs.
Delta didn’t disclose the entry requirements for the new lounges. It said the JFK location will have a full-service restaurant and “wellness” areas.
Delta also said it plans to open standard Sky Clubs in Charlotte, North Carolina and a new location in Seattle later this year. The carrier is planning to expand clubs in Miami and New York’s LaGuardia.
The new clubs come as Delta is focusing on the increasing importance of travelers flying toward the front of the plane. The airline said “premium” revenue from business class or premium economy tickets grew 26% last year to generate $19.1 billion in sales, while its main cabin ticket sales rose 20% to $24.5 billion. More

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