(Photo Credit: Nicole Yeary)
This week marks the beginning of the third quarter earnings season and expectations leave much to be desired. According to Estimize data, the S&P 500 is anticipated to post negative YoY EPS growth of 2.2%, with revenues pegged to come in at -1.7%. As always, it is still early, and estimates will tend to rise as the season progresses and companies beat expectations. The S&P 500 constituents listed below are the ones to watch for this week.
Tuesday, October 6
Wednesday, October 7
Thursday, October 8
Pepsico (PEP)
Consumer Staples – Beverages | Reports October 6, before the open
The Estimize consensus calls for EPS of $1.31 vs. Wall Street’s $1.27. The Estimize community is also expecting higher revenues of $16.4B as compared to the Street’s prediction of $16.2B
What to watch: Like many of its multinational peers, Pepsi has struggled with the strengthening US dollar this year. Pepsi gets nearly half of its sales from abroad, but has mostly been able to offset currency headwinds with a robust snacks segment and strategic price increases.
Last year PepsiCo delivered 4% organic revenue growth for the second year in a row, insisting this is a sign of a real comeback. Now in 2015, the 50th anniversary of the marriage of Pepsi-Cola and Frito-Lay, the company seems to be on track to do just as well. Strength in the first half of the year led PEP to raise full year EPS guidance last quarter. Like a lot of their food retail competitors, the wave of change in consumer preferences has prompted Pepsi to offer healthy alternatives. CEO Indra Nooyi said they are shifting resources from junk foods into the healthier alternatives and vowed to improve the healthiness of even the “fun” offerings.The carbonated drinks industry is also facing some headwinds as volumes continue to fall due changing demand patterns. The US consumer continues to become increasingly aware of the harmful effects associated with drinking carbonated soft drinks and therefore are beginning to turn to healthier products. It has been recently reported that U.S. per capita consumption of soda drinks has reached its lowest level since 1986.
