On Tuesday morning, Pepsi Bottling Group (NYSE: PBG) reported third-quarter earnings of $1.14 per share. The earnings include a net, post-tax gain of eight cents per share from favorable settlement of tax audits, restructuring charges, advisory fees, and gains from commodity hedges. A year ago, PBG earned $1.06 during the third quarter, which was matched by this year's results. Unfortunately for PBG, expectations called for $1.08 per share, leaving the stock lagging a bit in pre-market trade. Looking ahead, PBG expects earnings near the high end of its previously forecast range of $2.30 to $2.40. The Street expects the bottler to rake in $2.39 per share, so it seems that the company may be able to achieve expectations at first glance.
Technically, PBG has performed well of late, riding higher along support from its 10-week moving average. The shares have now moved through potential resistance at the $36 level and could resume their run back to early-2008 prices. What's more, a sharply ascending 10-month moving average should lend some momentum if the stock happens to stall for some reason.
During the calendar year, PBG has turned in two negative months -- January and February. The laws of motion suggest that an object in motion tends to stay in motion in the given direction, applying this to stocks one would think that PBG should continue its northward path. Unfortunately, laws of motion and science don't always apply to stocks.
Keep an eye on the round-number $40 level as PBG continues to advance. A clear break of this rather important benchmark could indicate that the stock is ready to challenge its all-time highs. However, this could be easier said than done. Let's see if PBG can continue capitalizing on its current momentum.
Closing Bell: When We All Love the PIIGS (NBG, SQNM, PG, ERTS, KO)
Serious Money: Cheapest Stocks List Shrinks from 26 to 21
Chasing Value: Hasbro Earnings Makes My Point
