The 10-second takeaway
For the quarter ended June 15 (Q2), Pepsico met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share expanded significantly. GAAP earnings per share increased significantly.
Margins grew across the board.
Pepsico booked revenue of $16.81 billion. The 14 analysts polled by S&P Capital IQ wanted to see net sales of $16.80 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.31. The 18 earnings estimates compiled by S&P Capital IQ averaged $1.19 per share. Non-GAAP EPS of $1.31 for Q2 were 17% higher than the prior-year quarter's $1.12 per share. GAAP EPS of $1.28 for Q2 were 36% higher than the prior-year quarter's $0.94 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 53.0%, 110 basis points better than the prior-year quarter. Operating margin was 17.1%, 220 basis points better than the prior-year quarter. Net margin was 12.0%, 300 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $17.32 billion. On the bottom line, the average EPS estimate is $1.27.
Next year's average estimate for revenue is $67.57 billion. The average EPS estimate is $4.40.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,386 members out of 4,538 rating the stock outperform, and 152 members rating it underperform. Among 1,234 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,205 give Pepsico a green thumbs-up, and 29 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Pepsico is outperform, with an average price target of $86.62.
Is Pepsico the best beverage bet for you? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average beverage seller. Click here for instant access to this free report.
- Add Pepsico to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends PepsiCo. The Motley Fool owns shares of PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.