10-QPeriod: Q1 FY2009

PEPSICO INC Quarterly Report for Q1 Ended Mar 21, 2009

Filed April 22, 2009For Securities:PEP

Summary

PepsiCo Inc. reported net revenue of $8.26 billion for the 12 weeks ended March 21, 2009, a slight decrease of 1% compared to the same period in the prior year. Net income attributable to PepsiCo was $1.135 billion, a marginal decrease of 1%, resulting in diluted earnings per share of $0.72, an increase of 3% year-over-year. The company experienced mixed results across its divisions, with strong growth in Frito-Lay North America and AMEA, while PepsiCo Americas Beverages and Europe saw declines. The report highlights the impact of unfavorable foreign currency exchange rates, which reduced net revenue and operating profit, particularly in Europe and Latin America Foods. The company also continued its Productivity for Growth program, incurring restructuring charges. PepsiCo's liquidity remained strong, with significant cash generated from financing activities, including new long-term debt issuances, to support operations and capital expenditures. The company also announced proposals to acquire the remaining shares of its major bottlers, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS), signaling a strategic move towards greater vertical integration.

Financial Highlights

27 data points
Beta

Revenue

$8.26B

54.7% Gross Margin

Net Income

$1.14B

13.7% Net Margin

EPS (Diluted)

$0.72

Cash & Equivalents

$2.19B

Free Cash Flow

-$266.00M

Financial Statements
Beta
Revenue$8.26B
Cost of Revenue$3.74B
Gross Profit$4.52B
SG&A Expenses$2.92B
Operating Income$1.59B
Interest Expense$98.00M
Net Income$1.14B
EPS (Basic)$0.73
EPS (Diluted)$0.72

Key Highlights

  • 1Net revenue for the quarter was $8.26 billion, down 1% year-over-year.
  • 2Net income attributable to PepsiCo was $1.135 billion, down 1% year-over-year.
  • 3Diluted EPS was $0.72, up 3% year-over-year, benefiting from share repurchases.
  • 4Favorable foreign currency exchange rates negatively impacted net revenue and operating profit.
  • 5Frito-Lay North America (FLNA) showed strong revenue growth of 10%, while PepsiCo Americas Beverages (PAB) saw a 12% revenue decline.
  • 6PepsiCo incurred $25 million in restructuring and impairment charges related to its 'Productivity for Growth' program.
  • 7The company announced proposals to acquire the remaining shares of PBG and PAS, indicating a move towards integration.

Frequently Asked Questions

In the 12 weeks ended March 21, 2009, PepsiCo reported net revenue of $8.26 billion, a slight decrease of 1% from $8.33 billion in the prior year. Net income attributable to PepsiCo was $1.135 billion, a marginal decrease of 1% from $1.148 billion. However, diluted earnings per share increased by 3% to $0.72, driven by share repurchases and a lower effective tax rate.

Unfavorable foreign currency exchange rates had a notable impact, reducing net revenue growth by 7 percentage points globally and operating profit growth by a similar margin. Specific divisions like Europe and Latin America Foods were significantly affected by currency depreciation.

The 'Productivity for Growth' program is an initiative aimed at increasing cost competitiveness, streamlining operations, and upgrading the product portfolio. In the first quarter of 2009, PepsiCo incurred $25 million ($19 million after-tax) in restructuring and impairment charges related to this program, which impacted operating profit and earnings per share.

PepsiCo announced proposals to acquire the remaining outstanding shares of its two largest anchor bottlers, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS). This move signals a strategic intention to increase vertical integration within its operations.