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Pepsi (PEP) Earnings Beat; Sales Miss Estimates in Q1

PepsiCo, Inc. PEP is one of the largest food and beverage business in North America and the second largest in the world. The company boasts a diverse portfolio, both geographically and product wise. Pepsi’s product portfolio includes 22 Billion Dollar brands including Pepsi, Mountain Dew, Gatorade, Tropicana, Lay's, Doritos, Cheetos and Quaker which generate more than $1 billion each in retail sales annually. Pepsi has the competitive advantage of selling both snacks and beverages which are complementary food categories.

Despite the ongoing global macro challenges, Pepsi did well in 2014 and 2015 supported by the strength in the snacks business, increased pricing, better execution, cost savings/productivity gains and brand-building investments.

Investors should note that the earnings estimate revisions for PEP have been mostly upwards over the past 60 days. Moreover, PEP has an impressive track record in the earnings season. It has delivered positive earnings surprises in three of the past four quarters, bringing the average to a positive surprise of 4.88%.

Currently, PEP has a Zacks Rank #3 (Hold), but that could definitely change following Pepsi’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: PEP beat earnings. Our consensus earnings estimate called for EPS of $0.81/share, and the company reported EPS of $0.89/share. Investors should note that these figures take out stock option expenses.

Revenues: PEP reported revenues of $11.86 billion. This marginally missed our consensus estimate of 11.90 billion.

Key Stats to Note: Revenues increased 3.5% on an organic basis, slightly less than 4% in the previous quarter.

Stock Price: Shares were in-active in pre-market trading.

Check back later for our full write up on this PEP earnings report later!

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