Before the stock market opened today (February 11) PepsiCo (PEP) reported earnings of 90 cents a share for the fourth quarter of 2009. That was a penny below Wall Street projections but almost twice the 46 cents a share the company reported in the fourth quarter of 2008.
At $13.3 billion revenue came in just ahead of the analyst consensus of $13.26 billion. Sales grew by 4.5% in the quarter from the fourth quarter of 2008.
The performance of PepsiCo’s business units followed recent form.
Frito-Lay North America continued to gain market share for the full year in 2009. In the fourth quarter net revenue grew by 2% and core operating profit climbed by 4%.
The company’s traditional beverage business in North America continued to fight negative trends in its category. For the full year volume and net revenue fell by 6%. In the fourth quarter, while volume fell by 5%, net operating profit climbed by 10% thanks to improved productivity in North America and growth in operating profit in Latin America. In the fourth quarter the company saw improved performance for Gatorade and SoBe Lifewater.
The star, as usual, was the company’s international unit, which delivered a 17% jump in core operating profit. In the fourth quarter international revenue grew by 5% but operating profit fell by 3% as the company invested in infrastructure in the Asia, Middle East, and Africa division.
 For 2010 the company said it is targeting 11% to 13% constant currency growth in earnings per share for the company including the effects of its plans to acquire its two biggest bottlers, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS). The company said it expects those acquisitions to close at the end of February. PepsiCo is projecting annual cost-savings from the acquisition of about $400 million once synergies are fully implemented in 2012. For 2010 those synergies will total about $125 million to $150 million, the company said.
 I don’t see anything here unexpected on either the up or downside.
 The stock remains a very good choice for a period of economic uncertainty. Shares have held up nicely during the correction of 2010 and they pay a dividend yield just a tad under 3%.
 As of February 11 I’m leaving my target price at $68 a share by June 2010.
