PepsiCo (NYSE: PEP)’s Not-So-Predicted Game Plan

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For big names like Pepsi (NYSE: PEP), quarterly revenue figures need to be evaluated and new objectives should be set, bearing in mind the cost, competition, latest trends in the market as well as the shareholders. This helps the companies evaluate their position in the competition, their strengths and weaknesses and how they can continue to improve in the next quarters. Such companies also need to note what game plan is required and what needs to be added or eliminated on the basis of needs and requirements. As the third quarter is coming to an end, Pepsi (NYSE: PEP) is preparing to analyze its position as well as a look in to the earnings per share (EPS) of $1.36 revenue summing up to $17.22 billion. These figures show that Pepsi’s (NYSE: PEP) has done better than last year’s EPS of $1.24 on $16.91 billion. According to research and analysis of various regions, Pepsi (NYSE: PEP) did well in terms of price and quantity in most of these areas. A 5.5% increase in operating income along with 2% growth in revenue was seen. According to GAAP, the operating profit as well as revenues rose by 2%.

But at home ground, the results weren’t very overwhelming, even though the operating cost increased by 4% for lower commodities, productivity and pricing due to operating cost inflation. This was a slight setback for the company.

Still, the vision set for adjusted yearly EPS for 2015 is expected to increase to 9% from the current 8%. As a result, estimated EPS is expected to go up to $4.76 which is much better than the $4.57 consensus estimate. But the company still has to bear the negative effect of the 3% currency translation on 2014 EPS growth.

Organic revenue growth along with productivity saving is expected to be $1 billion. The company has revealed its reservations about commodity price inflation for 2014.

The company’s CEO has reportedly stated a 3% increase in organic revenue, resulting in effective net pricing of strong price/pack revenue management. Keeping in mind these results, the company’s outlook for the next year has strengthened, hence increasing the year’s core constant currency EPS growth objective to nine percent.

The EPS was revised at the end of the second quarter already for the year but is increasing again towards the end of the third quarter. This has been a surprise for speculators and analysts, as the company achieved its 8 percent mark in the second quarter.

Pepsi (NYSE: PEP) aims to provide an $8.7 billion to shareholders in the year 2014 through $3.7 billion in dividends and $5 billion in shares. The shares have risen by 2% in premarket trading, hitting a 95 dollar mark, as compared to its 52 week range of $77.01 till $94.21. But sources like Reuters believe Pepsi (NYSE: PEP)’s consensus analyst price target to hit $98.60. As time passes, only then can we speculate Pepsi (NYSE: PEP)’s progress and arrive at a firm conclusion if its objectives will be achieved this year.

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