Business Overview: Coke and Pepsi

Paper Summary:

This paper looks at the differences in Coke's and Pepsi's financial performance in 2004 and expected earnings for 2005. The paper also explains how each company's ethical code of conduct and mission statement affects the success of the respective companies.

From the Paper:

"PepsiCo is on an upswing, Coca-Cola is headed in the opposite direction. For 2004, Pepsis' net income rose to $457 million, or $1.73 a share, from the previous year's $416 million, $1.50 a share (Pepsi Bottling Group 4Q profit increases). For 2005, Pepsi expects earnings of $1.78 to $1.87 per share. Coca-Cola has not yet released full year 2004 results. However, for the first nine months of the year, its net income declined to $514 million, or $1.09 a share, from the prior year's $545 million, or $1.19 a share (Coca-Cola Enterprises' profit falls). For the full year 2004, Coca-Cola expects earning of $1.21 to $1.25 a share and has recently cut long-term growth targets for operating income to a range of six percent to eight percent from ten percent. Shares of PepsiCo have outperformed those of Coca-Cola for two decades (Twitchell, 2004). In the past five years, Pepsi's stock has returned sixty-nine percent, while Coke investors have lost more than twenty percent of their money."

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