Another quarter, another sparkling performance for Pepsi Bottling Group
Unlike its syrup-providing sister company, Pepsi Bottling's operations are capital-intensive, but there's still plenty of free cash flow to satisfy even the most discriminating accountant. After spending between $675 million and $725 million this year on capital expenditures, Pepsi Bottling expects to still have around $500 million for share buybacks, debt reduction, or other corporate uses.
Speaking of share buybacks, the company repurchased 3.3 million of its shares in the third quarter. Since starting its share repurchase program in 1999, the company has repurchased 95.7 million shares. Today it has $1.6 billion of treasury stock on the books.
Last quarter, the company raised 2005 earnings guidance to between $1.82 and $1.88 a share. Today, the company narrowed that target to a range of $1.83 to $1.87 a share -- pricing the stock at 15.2 times the mean analyst estimate of $1.86 a share.
Investors may hesitate when they see that competitor Coca-Cola Enterprises
At midday, Pepsi Bottling stock is up 4% -- 8% above its year-ago price. Compared to its sector peers, this stock's value looks downright refreshing.