Ahead of its earnings report, Pepsi (PEP) shares rallied to almost $150. Speculators bet that the beverage and food supplier would beat expectations.
In Q2, Pepsi posted non-GAAP EPS of $2.20, missing expectations. Revenue grew by 6.4% Y/Y to $24.18 billion. For this year, the firm forecasts organic revenue growth of between 2% and 4%. Shareholder returns total around $8.9 billion. Pepsi is paying $7.9 billion in dividends and buying back $1.0 billion in shares.
Expect Pepsi to continue growing by sales volume this year.
In the automotive sector, Volkswagen (VWAGY) closed near a 52-week low at $8.21. Sales fell by 8.6% in Q2. In China markets, sales fell by 36.6%. Electric vehicle sales declined, too, in the double-digit percentage range. EV sales in Europe, however, grew by 5.7%. The tax credit cancellation in the U.S. likely contributed to a 49% drop in EV sales in North America.
In the drone market, shares of AeroVironment (AVAV) faded greatly. The stock rallied to around $200 after it posted results earlier this month. But relentless profit-taking sent shares down to close at $144.58 last week.
In the next several years, expect AeroVironment to post stronger adjusted gross margins. Profitability will benefit from a better product mix compared to service revenue. In addition, the company will win more fixed-price commercial contracts.
