...given they upped the core constant FX forecast (note the big FX hit - a theme I already noted with my WD-40 earnings numbers analysis here) but also they noted ongoing productivity savings and cash return to shareholders which is equivalent to 6% of market cap. As a combination of metrics these are not too shabby at all...
Looking at the numbers I was really impressed by the (almost) across the board positive pricing. Now admittedly this will still mean - due to the FX impact - negative sequential operating income movement. Still impressive though - and there was even some emerging market volume growth too.
'Returning cash to shareholders remain our top priority'
'Lean mean machine' re Latam bringing together of cost base
Frito Lay - seem to be preferring prices to volume
Exchange rates - Venezeula 2% of revenues and operating profit
Retail environment in the UK is 'interesting...entire retail situation re-set'. Admitted lost some shorter-term market share
Innovation - 'get lots more price-mix...pricing innovation...is a real step-up'
Russia - 'doing well...business environment been good for us'
So pulling it all together my observations would be that I like the cash return to shareholders (c. 6% of market cap) note that a prospective EV/ebit multiple of x16 is fairly full and conclude that below US$95 and especially below US$90 opportunities to augment a PepsiCo position is apparent. Interestingly this is what I concluded the last time I talked about the stock here:
'Below US$90 is a solid 'hold-buy' level for new money. I would say that my pension fund to buy a position would have to see a slightly lower price than this. Impressive numbers though? Yes'