PEPSICO INC. $79 - New York symbol PEP

PEPSICO INC. $79 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.5 billion; Market cap: $118.5 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.pepsico.com) earned $2.05 billion in the three months ended June 15, 2013, up 16.1% from $1.8 billion a year earlier. Earnings per share rose 17.0%, to $1.31 from $1.12, on fewer shares outstanding. The latest earnings included a $0.09-a-share gain on a deal to refranchise PepsiCo’s bottling operations in Vietnam. Revenue rose 2.1%, to $16.8 billion from $16.5 billion.

The company expects to save $900 million this year, mainly by closing plants and cutting jobs. PepsiCo will use some of these savings to develop and promote new products, particularly healthier snack foods. The savings will also help the company offset higher ingredient costs. However, soft drink sales continue to decline, particularly in North America.

PepsiCo is a hold.

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