Can PepsiCo’s Stock Price Gain Momentum with Upcoming Results?



Third-quarter results

PepsiCo (PEP) is scheduled to announce results for 3Q15 on October 6. The third quarter for fiscal 2015 ended on September 5. PepsiCo’s earnings and revenue were ahead of consensus Wall Street analyst expectations in 2Q15, which ended June 13, 2015.

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No fizz in the first half performance

PepsiCo’s revenue in the first half of fiscal 2015 came in at $28.1 billion, down 4.7% on a year-over-year basis. PepsiCo’s Frito-Lay North America and North America Beverages were the only two segments that posted revenue growth in 1H15.

PepsiCo’s net income increased by 0.2% to $3.2 billion in 1H15, as the impact of lower revenue was offset by lower restructuring and impairment charges.

Year-to-date stock price movement

PepsiCo’s stock price has fallen 1% to $93.47 since the beginning of 2015. The stock price for Coca-Cola (KO) has taken a steeper fall of 6% since the beginning of 2015. However, Dr Pepper Snapple Group’s (DPS) stock price has risen 9.2% since the start of this year.

The Consumer Staples Select Sector SPDR ETF (XLP) and the broader market represented by the S&P 500 Index (SPY) (IVV) have fallen 1.8% and 6.2%, respectively, since the beginning of this year.

All the above stock price movements are as of September 25, 2015.

Stock prices for PepsiCo and Coca-Cola have been impacted by weak performance in the first half of the year and the recent turmoil in the stock markets due to global factors like the slowdown in China.

PepsiCo and Coca-Cola together account for 9.2% of the portfolio holdings of the iShares Global Consumer Staples ETF (KXI) and 4.1% of the iShares Russell Top 200 Growth ETF (IWY).

In the next part of this series, we’ll take a look at the expectations from PepsiCo’s 3Q15 earnings.


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