PepsiCo Inc. Reports Operating Results (10-Q)
Pepsico Inc. has a market cap of $107.46 billion; its shares were traded at around $65.02 with a P/E ratio of 17.3 and P/S ratio of 2.5. The dividend yield of Pepsico Inc. stocks is 2.8%. Pepsico Inc. had an annual average earning growth of 8.9% over the past 10 years. GuruFocus rated Pepsico Inc. the business predictability rank of 2.5-star.PEP is in the portfolios of Donald Yacktman of Yacktman Asset Management Co., Chase Coleman of TIGER GLOBAL MANAGEMENT LLC, Chris Shumway of Shumway Capital Partners LLC, Jeremy Grantham of GMO LLC, Diamond Hill Capital of Diamond Hill Capital Management Inc, Bruce Kovner of Caxton Associates, Lee Ainslie of Maverick Capital, Tom Russo of Gardner Russo & Gardner, Eric Mindich of Eton Park Capital Management, L.P., Eric Mindich of Eton Park Capital Management, L.P., Steven Cohen of SAC Capital Advisors, John Buckingham of Al Frank Asset Management, Inc., Tom Gayner of Markel Gayner Asset Management Corp, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Manning & Napier Advisors, Inc, Murray Stahl of Horizon Asset Management, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, PRIMECAP Management, Bill Frels of MAIRS & POWER INC, George Soros of Soros Fund Management LLC, Jim Simons of Renaissance Technologies LLC, Arnold Van Den Berg of Century Management, Dodge & Cox, Kenneth Fisher of Fisher Asset Management, LLC.
Highlight of Business Operations: For the 12 weeks ended March 20, 2010, we recognized $46 million ($29 million after-tax or $0.02 per share) of mark-to-market net gains on commodity hedges in corporate unallocated expenses.
For the 12 weeks ended March 21, 2009, we recognized $62 million ($40 million after-tax or $0.03 per share) of mark-to-market net gains on commodity hedges in corporate unallocated expenses.
In the first quarter of 2009, we incurred charges of $25 million ($19 million after-tax or $0.01 per share) in conjunction with our Productivity for Growth program. The program included actions in all divisions of the business, including the closure of six plants that we believe will increase cost competitiveness across the supply chain, upgrade and streamline our product portfolio, and simplify the organization for more effective and timely decision-making. These initiatives were completed in the second quarter of 2009.
In the first quarter of 2010, in connection with our acquisitions of PBG and PAS, we recorded a gain on our previously held equity interests of $958 million ($0.60 per share), comprising $735 million which is non-taxable and recorded in bottling equity income and $223 million related to the reversal of deferred tax liabilities associated with these previously held equity interests.
In the first quarter of 2010, we incurred merger and integration charges of $312 million related to our acquisitions of PBG and PAS, including $193 million recorded in the PAB segment, $1 million recorded in the Europe segment, $88 million recorded in corporate unallocated expenses and $30 million recorded in interest expense. These charges are being incurred to help create a more fully integrated supply chain and go-to-market business model, to improve the effectiveness and efficiency of the distribution of our brands and to enhance our revenue growth. These charges also include closing costs, one-time financing costs and advisory fees related to our acquisitions of PBG and PAS. In addition, we recorded $9 million of charges, representing our share of the respective merger costs of PBG and PAS, recorded in bottling equity income. In total, these charges had an after-tax impact of $261 million or $0.16 per share.
As of the beginning of our 2010 fiscal year, we recorded a one-time $120 million net charge related to our change to hyperinflationary accounting for our Venezuelan businesses and the related devaluation of the bolivar. $129 million of this net charge was recorded in corporate unallocated expenses, with the balance (income of $9 million) recorded in our PAB segment. In total, this net charge had an after-tax impact of $120 million or $0.07 per share.
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