PepsiCo’s Solid Quarter, Eli Lilly Beats Projections, and 3 More Hot Stocks

PepsiCo (NYSE:PEP): Pepsi has reported earnings per share of $1.31, enough to beat estimates by 12 cents. Revenue of $16.8 billion just passed projections by $0.01 billion, and core gross margins rose 120 bps on the heels of a marketing expense increase of 13 percent. Organic revenue grew 4.2 percent, spurred by emerging market growth of 11 percent. The company keeps its guidance of $900 million in productivity savings in 2013 and $3 billion from 2012 to 2014. Pepsi is still on track to return $6.4 billion of capital to shareholders this year, with $3.4 billion in dividends and $3 billion in share repurchases.


Eli Lilly & Co. (NYSE:LLY): Second-quarter earnings per share reached $1.16 to beat projections by 15 cents. Revenue of $5.93 billion also beat, by $0.11 billion. A 25 percent drop in Zyprexa sales due to patent expirations didn’t hold back the 6 percent gain in revenues; Cymbalta and Cialis sales saw 22 percent and 13 percent gains, respectively. The gross margin swelled 80 basis points since last year, and guidance has been raised to $4.28 to 4.38 per share on revenue of $22.6 billion to 23.4 billion against a consensus of $3.92 per share on sales of $22.8 billion.


Delta Airlines (NYSE:DAL): Delta’s second-quarter EPS of 98 cents beat estimates by 4 cents, though revenue of $9.71 billion missed by $0.03 billion. Domestic revenue grew 3.7 percent to $3.9 billion, while cash flow from operations generated $1.3 billion, minus about  $500 million in accelerated pension funding leaving $730 million of free cash flow. A non-fuel unit cost increase of 2.5 percent was 200 bps lower than guidance and indicates a “positive trend to continue in September.”


Caterpillar (NYSE:CAT): Two misses (EPS of $1.45 missing by 25 cents and revenue of $14.62 billion missing by $0.41 billion) have pushed Caterpillar shares down over 2 percent. A $1 billion reduction in dealer machine inventory was more than expected, and it seems that dealers are positioned to reduce it even further. The company’s management expects it to decline another $1.5 billion to $2 billion in the second half, ending the year at about $3.5 billion in reductions. ”2013 is turning out to be a tough year and we’ve already taken action to reduce costs,” the company said.


Dr Pepper Snapple Group (NYSE:DPS): EPS of 84 cents fell in line with analyst expectations as revenue of $1.61 billion missed by $0.04. Net sales decreased by 1 percent, and a sales volume decline of 4 percent was partially offset by a 2 percent boost in favorable pricing and mix.


Don’t Miss: Pepsi Earnings Impress Despite Soda’s Struggles.