Lukewarm Pepsi: Fool by Numbers

On July 24, PepsiCo (NYSE: PEP  ) released second-quarter earnings for the period ended June 16.

  • Can you think of a better business model than selling snacks and beverages? The company portfolio remains strong; its international business and Frito-Lay division are cranking up the volume.
  • Profits rose 16% after benefiting from a 220 basis point decrease in the quarterly tax rate.
  • Given the strong performance thus far for the year, management upped guidance for 2007 to at least $3.35 per share.
  • Over 1,000 Motley Fool CAPS players have weighed in with their take on PepsiCo, ranking the stock four stars out of five.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$9,607.0

$8,714.0

10.2%

Net Profit

$1,557.0

$1,375.0

13.2%

EPS

$0.94

$0.81

16.0%

Diluted Shares

1,669.0

1,692.0

(1.4%)

Get back to basics with the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

54.8%

55.7%

(0.9)

Operating Margin

20.4%

20.7%

(0.3)

Net Margin

16.2%

15.8%

0.4

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$1,862.0

$2,678.0

(30.5%)

Accounts Rec.

$4,669.0

$4,104.0

13.8%

Inventory

$2,510.0

$2,100.0

19.5%

Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable*

$6,870.0

$6,184.0

11.1%

Long-Term Debt

$3,261.0

$2,542.0

28.3%

*Accounts payable includes other liabilities.

The balance sheet reflects the company's health.

Cash Flow Highlights

YTD 2007

YTD 2006

Change

Cash From Ops.

$2,018.0

$1,780.0

13.4%

Capital Expenditures

$743.0

$708.0

4.9%

Free Cash Flow

$1,275.0

$1,072.0

18.9%

Free cash flow is a Fool's best friend.

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.


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