Summary
PepsiCo Inc. reported its third-quarter and year-to-date results for the period ending September 5, 2009. The company demonstrated resilience with modest top-line growth and an increase in operating profit for both the quarter and year-to-date periods, despite facing currency headwinds. Net revenue saw a slight decrease of 1.5% for the quarter, totaling $11.08 billion, but operating profit increased by a strong 12% to $2.23 billion. For the first nine months of the year, net revenue decreased by 2% to $29.94 billion, while operating profit grew 5% to $6.01 billion. Diluted earnings per share (EPS) for the quarter rose to $1.09 from $0.99 in the prior year, and year-to-date EPS increased to $2.87 from $2.74, reflecting the company's ability to manage costs effectively and benefit from strategic hedging and acquisitions. A significant development highlighted in the filing is the pending merger with The Pepsi Bottling Group (PBG) and PepsiAmericas (PAS), announced in August 2009. The company is navigating this complex process, which is expected to yield significant cost savings and synergies upon completion. While the integration process presents potential risks and challenges, management believes the strategic rationale for these mergers is strong. The company's strong cash flow generation continues to support shareholder returns, with substantial dividend payments made during the period, while share repurchases were halted in anticipation of the mergers.
Financial Highlights
51 data points| Revenue | $11.08B |
| Cost of Revenue | $5.18B |
| Gross Profit | $5.90B |
| SG&A Expenses | $3.65B |
| Operating Income | $2.23B |
| Interest Expense | $86.00M |
| Net Income | $1.72B |
| EPS (Basic) | $1.10 |
| EPS (Diluted) | $1.09 |
| Shares Outstanding (Basic) | 1.56B |
| Shares Outstanding (Diluted) | 1.58B |
Key Highlights
- 1Net revenue for the 12 weeks ended September 5, 2009, was $11.08 billion, a decrease of 1.5% compared to $11.24 billion in the prior year.
- 2Operating profit for the 12 weeks increased 12% to $2.23 billion from $1.99 billion in the prior year, with a 2.4 percentage point increase in operating margin.
- 3Diluted earnings per share (EPS) for the 12 weeks were $1.09, up from $0.99 in the same period last year.
- 4Year-to-date (36 weeks) net revenue was $29.94 billion, down 2% from $30.52 billion in the prior year.
- 5Year-to-date operating profit increased 5% to $6.01 billion from $5.74 billion, with a 1.3 percentage point increase in operating margin.
- 6Year-to-date diluted EPS rose to $2.87 from $2.74.
- 7The company announced pending merger agreements with The Pepsi Bottling Group, Inc. (PBG) and PepsiAmericas, Inc. (PAS) in August 2009, aiming for significant cost savings and synergies.
- 8Net cash provided by operating activities for the 36 weeks was $4.40 billion, though the company made a significant discretionary pension contribution.