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S&P 500 (NYSE:SPY) component PepsiCo (NYSE:PEP) will unveil its latest earnings on Wednesday, October 17, 2012. PepsiCo is a global company that manufactures a variety of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages, and foods.
PepsiCo Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.16 per share, a decline of 11.5% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.20. Between one and three months ago, the average estimate moved down. It has been unchanged at $1.16 during the last month. Analysts are projecting profit to rise by 7.5% compared to last year’s $4.07.
Past Earnings Performance: Last quarter, the company beat estimates by 3 cents, coming in at profit of $1.12 a share versus the estimate of net income of $1.09 a share. It marked the fourth straight quarter of beating estimates.
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A Look Back: In the second quarter, profit fell 21.1% to $1.49 billion (94 cents a share) from $1.89 billion ($1.17 a share) the year earlier, but exceeded analyst expectations. Revenue fell 2.2% to $16.46 billion from $16.83 billion.
Stock Price Performance: Between August 15, 2012 and October 11, 2012, the stock price had fallen $2.80 (-3.9%), from $72.62 to $69.82. The stock price saw one of its best stretches over the last year between November 23, 2011 and December 7, 2011, when shares rose for 10 straight days, increasing 4% (+$2.51) over that span. It saw one of its worst periods between February 7, 2012 and February 17, 2012 when shares fell for nine straight days, dropping 6.1% (-$4.08) over that span.
Wall St. Revenue Expectations: On average, analysts predict $16.92 billion in revenue this quarter, a decline of 3.8% from the year-ago quarter. Analysts are forecasting total revenue of $65.68 billion for the year, a decline of 0.3% from last year’s revenue of $65.88 billion.
On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 13.3% in the third quarter of the last fiscal year, 11% in the fourth quarter of the last fiscal year and 4.1%in the first quarter before dropping in the second quarter.
After experiencing income drops the past two quarters, the company is hoping to use this earnings announcement to rebound. Net income dropped 1.4% in the first quarter and then again in the second quarter.
Analyst Ratings: With 11 analysts rating the stock a buy, none rating it a sell and four rating the stock a hold, there are indications of a bullish stance by analysts.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.99 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company regressed in this liquidity measure from 1.03 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 7.6% to $18.27 billion while assets rose 2.6% to $18.03 billion.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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