Summary
PepsiCo, Inc. (PEP) reported its Q2 2010 results, significantly impacted by the completion of its acquisitions of The Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) in February 2010. These acquisitions resulted in a substantial increase in net revenue and assets, alongside a significant rise in debt. The integration of PBG and PAS is a major focus, leading to increased merger and integration costs. Despite these integration expenses and a $958 million gain from revaluing previously held equity interests in PBG and PAS, the company's financial performance shows resilience. For the 24 weeks ended June 12, 2010, net income attributable to PepsiCo increased by 9% to $3.033 billion, with diluted EPS rising 5% to $1.87. The company experienced strong volume growth in its beverage segment, largely driven by the acquired bottlers, while snack volumes showed more modest growth. The company is actively managing its expanded debt load and has reaffirmed its commitment to returning capital to shareholders through dividends and share repurchases.
Financial Highlights
52 data points| Revenue | $14.80B |
| Cost of Revenue | $6.75B |
| Gross Profit | $8.06B |
| SG&A Expenses | $5.56B |
| Operating Income | $2.46B |
| Interest Expense | $172.00M |
| Net Income | $1.60B |
| EPS (Basic) | $1.00 |
| EPS (Diluted) | $0.98 |
| Shares Outstanding (Basic) | 1.61B |
| Shares Outstanding (Diluted) | 1.63B |
Key Highlights
- 1Completed the transformative acquisitions of The Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) in February 2010 for approximately $12.6 billion, creating a more integrated supply chain.
- 2Reported a 28% year-over-year increase in net revenue for the 24 weeks ended June 12, 2010, reaching $24.169 billion, largely due to the consolidated results of PBG and PAS.
- 3Net income attributable to PepsiCo increased 9% to $3.033 billion for the 24-week period, with diluted EPS growing 5% to $1.87.
- 4Recorded a significant gain of $958 million on previously held equity interests in PBG and PAS due to accounting requirements for business combinations.
- 5Incurred substantial merger and integration charges totaling $467 million for the 24-week period related to the PBG and PAS acquisitions.
- 6Cash provided by operating activities significantly increased to $2.442 billion for the 24-week period, up from $1.492 billion in the prior year, demonstrating strong cash generation despite acquisition-related expenses.
- 7The company's long-term debt increased significantly due to financing for the PBG and PAS acquisitions, reaching $19.586 billion as of June 12, 2010.