Management succeeded in turning a revenue decline into a positive profit story. The powers that be reduced the costs of sales, as well as selling, general and administrative expenses.

Cash flow, unfortunately, took a dip. Net cash from operating activities for the nine-month period went from $4.7 billion to $4.4 billion. The company did reduce capital spending, however, so free cash flow was lucky enough to receive a little defense.

Don't worry, though. Dividends were more than covered by the cash brought in. There were no common-stock share repurchases so far this year (only a small amount of preferred-stock was bought back in the last three quarters). I would have liked to have seen some activity in this area, but to be fair, management stated that the reason for a lack of a buyback is the pending acquisition of Pepsi Bottling Group (NYSE: PBG). This was mentioned in the earnings call. Seeking Alpha has a transcript of the event at its site.

PepsiCo remains a blue-chip core holding for a portfolio that isn't designed to possess a lot of turnover. That being said, I'm not bullish on the acquisition of the bottler. Personally, I would prefer PepsiCo to remain separate from that enterprise. In my mind, this would promote a better opportunity for focusing on growth. Still, the beverage giant should bring in increasing cash flows over time by leveraging its brand equity, so I'm certainly not ready to go bearish on PepsiCo.

Disclosure: I own Coke; positions can change without notice.