PepsiCo Inc. Earnings Cheat Sheet: Another Solid Sales Quarter

S&P 500 (NYSE:SPY) component PepsiCo Inc. (NYSE:PEP) reported its results for the second quarter. PepsiCo, Inc. is a global company that manufactures a variety of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages and foods.

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PepsiCo Earnings Cheat Sheet for the Second Quarter

Results: Net income for the processed and packaged goods company rose to $1.91 billion ($1.17 per share) vs. $1.6 billion (98 cents per share) in the same quarter a year earlier. This marks a rise of 18.8% from the year earlier quarter.

Revenue: Rose 13.7% to $16.83 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: PEP fell short of the mean analyst estimate of $1.21 per share. It beat the average revenue estimate of $16.41 billion.

Quoting Management: “Our global portfolio in both snacks and beverages is growing volume and net revenue, our global snacks portfolio, in particular, posted another strong quarter with balanced top- and bottom-line growth, and we continue to enjoy robust top-line growth in key emerging markets,” said PepsiCo Chairman and CEO Indra Nooyi. “While we are satisfied with the performance of our portfolio overall, the consumer in developed markets continues to be stressed, and the competitive environment in North America beverages has been particularly challenging. We are therefore implementing previously announced incremental pricing actions in the third quarter to more fully cover input costs while continuing to support our brand-building initiatives. We remain confident in our ability to continue to profitably grow our overall business, even in this uncertain economic environment.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 31.5%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 40% from the year earlier quarter.

Gross margin shrank 1.8 percentage points to 52.7%. The contraction appeared to be driven by increased costs, which rose 18.1% from the year earlier quarter while revenue rose 13.7%.

The company fell short of forecasts after beating estimates in the previous two quarters. In the first quarter, it topped the mark by one cent, and in the fourth quarter of the last fiscal year, it was ahead by one cent.

Last quarter’s profit increase breaks a streak of two consecutive quarters of year-over-year profit decreases. In the first quarter, net income fell 20.1% while the figure dropped in the fourth quarter of the last fiscal year.

Competitors to Watch: The Coca-Cola Company (NYSE:KO), Dr Pepper Snapple Group Inc. (NYSE:DPS), Coca-Cola Enterprises Inc. (NYSE:CCE), Hansen Natural Corporation (NASDAQ:HANS), Reed’s, Inc. (NASDAQ:REED), Cott Corporation (NYSE:COT), National Beverage Corp. (NASDAQ:FIZZ), Jones Soda Co. (NYSE:USA) (NASDAQ:JSDA), Celsius Holdings, Inc. (NASDAQ:CELH), and Fomento Economico Mexicano SAB (NYSE:FMX).

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(Source: Xignite Financials)