PepsiCo, Inc. (PEP) Earnings: An Early Look

Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and PepsiCo, Inc. (NYSE:PEP) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

PepsiCo, Inc. (NYSE:PEP)

Beverage and snack-food behemoth PepsiCo has been looking throughout the world to cash in on its well-established business, fighting to gain supremacy in key emerging markets. Let’s take an early look at what’s been happening with PepsiCo over the past quarter and what we’re likely to see in its quarterly report on Thursday.

Stats on PepsiCo

Analyst EPS Estimate $1.05
Change From Year-Ago EPS (8.7%)
Revenue Estimate $19.7 billion
Change From Year-Ago Revenue 0.9%
Earnings Beats in Past 4 Quarters 4

Source: Yahoo! Finance.

Will PepsiCo fizz up this quarter?
Analysts have perennially underestimated PepsiCo’s earnings prospects, but they’ve nevertheless stayed resolute in their guesses this time around, keeping consensus projections constant for the past three months. The stock has done pretty well lately, though, rising 6% since early November as overall market sentiment has improved.

In its global business, Pepsi faces two very different sets of conditions. Globally, the company is fighting tooth and nail with rival The Coca-Cola Company (NYSE:KO) in an attempt to tap into growth markets, ranging from Asia to Africa and the Middle East. But in the U.S., growing concerns about obesity have led both PepsiCo and Coke to try to head off regulatory efforts by providing calorie information on vending machines and playing up their respective healthy-product lines.

One thing to watch for in Pepsi’s report is whether Pepsi will give in to pressure from investors to split itself up into its two major segments, allowing its successful snack business to separate from its sluggish soda segment, which has posted sales declines in the U.S. market recently. Mondelez International Inc (NASDAQ:MDLZ) achieved the same goal of accentuating its high-growth snack business when it spun off its Kraft Foods Group Inc (NASDAQ:KRFT) North American grocery business, which like Pepsi’s beverage business had lower growth and margins than its snack unit.

In evaluating Pepsi’s report, be sure to go beyond headline numbers to break out performance in each of the company’s business-line and geographical segments. Finding out where the growth is will be your best key to understanding the direction that Pepsi needs to move in to maximize its future profit potential.

The article PepsiCo Earnings: An Early Look originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Coca-Cola and PepsiCo. The Motley Fool owns shares of PepsiCo.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!