PepsiCo has increased its dividend pay-out and authorised a higher cash outlay for share repurchases. The company has also said that Q1 performance so far is strong across all businesses.

PepsiCo's board of directors announced yesterday that PepsiCo's annual dividend payout will increase by 44%, from $0.64 to $0.92 per share. The new plan will be implemented with the next dividend that will be declared, subject to the board's action in May, and payable in June 2004. This increase in the dividend represents the 32nd consecutive increase in the annual dividend since 1972.

The board also approved a higher level of share repurchases, authorising the repurchasing of up to $7 billion of common stock over the next three years, once the current repurchase authorisation is complete. The current $5 billion program began in August 2002 and will be completed shortly.

Based on year-to-date stock repurchases and this new authorisation to continue the program, PepsiCo now expects to spend over $2.5 billion to repurchase stock in 2004.

Taken together, the company said, these actions continue PepsiCo's policy of returning cash to shareholders. Over the last three fiscal years 2001-2003, PepsiCo has returned close to $9 billion in dividends and share repurchases.

Regarding PepsiCo's first quarter performance, the company said that revenue growth is at 10% and it expects first quarter earnings per share to be approximately $0.46. PepsiCo's most recent full-year earnings per share guidance, provided on 9 February 2004, was in the range of $2.27 to $2.29. Because of the strong momentum in the businesses, PepsiCo now expects full year earnings per share to be at the high end of this guidance.

In a statement, chairman and CEO Steve Reinemund said: "I am very pleased with the operating momentum that all our businesses are demonstrating at the start of the year. This is our second consecutive quarter of double-digit revenue growth.

"I am also very pleased that we can step up our dividend and share repurchase programs. Our strong cash generation, coupled with our low debt levels, allows us to retain financial flexibility to fund future growth opportunities and, at the same time, significantly increase our cash returned to shareholders," he added.

An update on PepsiCo's businesses will be delivered later today on