On Tuesday, Oct. 3, Pepsi Bottling Group (NYSE:PBG) released fiscal third-quarter 2006 earnings for the period ending Sept. 9, 2006. Here are the quick and dirty details for the quarter.

  • Top-line growth continues to be decent; for the quarter, sales grew 7.7% to $3.5 billion. From a geographic perspective, European growth was the strongest at 14% (16% of sales for the quarter), followed by U.S./Canada, up 7% (74% of sales), while Mexico grew sales only 5% (10% of sales).
  • Net profit grew only 1%, but earnings grew close to 5% because of less diluted shares (due to share repurchases). Europe led the way again, with a 36% improvement in operating income, followed by Mexico, which grew operating income 5%. U.S./Canada was the laggard, as operating income there fell 10%.
  • Margins fell across the board, while net margins fell a slight 40 basis points to 5.98%, demonstrating the razor-thin margins of the bottling industry.
  • Management expects full-year earnings of $1.90 to $1.93 for 2006, which includes $0.18 in stock option expenses and the $0.05 in gains from income tax law changes.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$3,410

$3,460

$3,214

7.7%

Net Profit

--

$207

$205

1%

EPS

$0.80

$0.86

$0.82

4.9%

Diluted Shares

242

250

(3.2%)

*Q3 2006 included $0.04 in stock option expenses and a $0.05 gain from income tax law changes.
*Q3 2005 included a $0.04 gain from a corn syrup litigation settlement.

Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

46.50%

47.26%

(0.76)

Operating Margin

11.07%

12.23%

(1.16)

Net Margin

5.98%

6.38%

(0.40)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$862

$267

222.8%

Accounts Rec.

$1,736

$1,422

22.1%

Inventory

$638

$510

25.1%



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$1,948

$1,644

18.5%

Long-Term Debt

$4,741

$4,479

5.8%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q3 2006

Q3 2005

Change

Cash From Ops.

$705

$770

(8.4)%

Capital Expenditures

$519

$469

10.7%

Free Cash Flow

$186

$301

38.2%

*36 weeks ended September 9, 2006 and September 3, 2005

Find out why Fools always follow the money.

Related Companies:

  • Pepsi (NYSE:PEP)
  • PepsiAmericas (NYSE:PAS)
  • Coca-Cola (NYSE:KO)
  • Coca-Cola Enterprises (NYSE:CCE)
  • Coca-Cola FEMSA (NYSE:KOF)
  • National Beverage (AMEX:FIZ)

For more Foolishly bottled fun:

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.

Coca-Cola is a Motley Fool Inside Value recommendation. For more great companies trading at exceptional prices, try your free 30-day trial here.

Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to further discuss any companies mentioned. The Fool has an ironclad disclosure policy.