PepsiCo's 3Q should give glimpse at turnaround
NEW YORK -- PepsiCo Inc. should give investors a snapshot of the company's progress in bolstering its flagship brands this year when it reports its third quarter results Wednesday.
WHAT TO WATCH FOR: The food and beverage company is pouring more money into marketing this year to enhance the stature of its biggest brands, including Pepsi cola and Gatorade. The thinking is that this will help cultivate customer loyalty and make the products more resilient to competition and price hikes.
WHY IT MATTERS: The Purchase, N.Y.-based company has a diverse portfolio of brands, including Tropicana, Quaker Oats and its Frito-Lay snack unit. But its image is often colored by the performance of Pepsi cola, which has flagged in recent years.
As a result, PepsiCo this year launched a major marketing campaign enlisting pop stars and athletes to rejuvenate the image of its namesake soda. It's not clear whether the push will pay off over the long term, but sales volume in the company's North American soda unit was down last quarter.
PepsiCo has also warned that its adjusted earnings would dip by 5 percent this year partly as a result of a cost-cutting program.
WHAT'S EXPECTED: Analysts on average expect a profit of $1.16 per share on revenue of $16.98 billion, according to FactSet.
LAST YEAR'S QUARTER: The company earned $2 billion, or $1.25 per share, on revenue of $17.58 billion.