That other cola brand, PepsiCo Incorporated (NYSE:PEP) reported its quarterly financials this morning and despite faltering in almost every area is on the rise in early trading today. Pepsi reported revenue of $16.46 billion, in line with analyst estimates, down 33.21% from the previous quarter and up 4.11% from a year earlier.
Earnings per share at Pepsi missed the analyst target of $1.09, coming in at $0.94 instead. Earnings were reduced by several factors including a 0.8%drop in operating margin, a loss of 3% due to foreign exchange and the comparative strength of the greenback, and a reduction in beverage sales volume in the America’s and Europe.
Despite the weak numbers executives at Pepsi have re-affirmed their 2012 guidance at $4.18 earnings per share, a 5% decrease from fiscal 2011. A trimmed down more efficient Pepsi believes that selling its bottling operations in China and Mexico and reducing its overall workforce will add directly to the bottom line.
Pepsi is a major player in the food, beverage, and savory snack industries. Its brands include Quaker, Tropicana, Frito-Lay, and Pepsi Cola and it is also serves as the main bottler for the Dr. Pepper Snapple Group’s (NYSE:DPS) 7-Up brand.
In early trading Wednesday PEP is trading up 1.15% at $69.58, outpacing the Dow Jones Industrial Average by 0.54% and other consumer goods by 1.67%.
Foodbeat’s take: As a dividend aristocrat and a leader on almost every list of ‘stocks to hold forever’ it will be interesting to see as profits slip if PEP can keep its title. As we move away from high sugar items, excessive snacking, and advertising of these not-so-healthy items the future of PepsiCo is unclear.
Disclosure: I hold a long position in both PEP and DPS.
Sources: Reuters, Cogo News