Pepsi Bottling Group (NYSE: PBG), a beverage entity that competes with Coca-Cola (NYSE: KO) and Coca-Cola Enterprises (NYSE: CCE), reported Q2 earnings on Wednesday. Adjusting for a gain related to tax issues, the company earned 78 cents per share.

According to Trey Thoelcke's earnings preview, Pepsi Bottling Group was only supposed to make about 73 cents per share. So, management managed to beat Wall Street's projections. Unfortunately, management made the same amount of per-share profit in the year-ago period, so there wasn't any growth on the bottom line.

Pepsi Bottling Group Inc. (NYSE: PBG), the world's largest manufacturer and distributor of Pepsi-Cola beverages, is scheduled to discuss its second quarter 2009 results tomorrow morning in a conference call at 11:00 AM ET. You can catch the live webcast of the call on the company's website.

For the quarter in which Pepsi Bottling Group saw a buyout offer from PepsiCo (NYSE: PEP) and completed an acquisition of its own, analysts polled by Thomson Reuters expect the company to report earnings of $0.73 per share, which is a nickel per share lower than in the same period of the previous year, as well as in line with previous guidance. Revenue for the quarter is expected to be 2.0% lower to $3.5 billion. The dividend-paying company has topped earnings estimates in the five past quarters, by as much as a nickle per share.

Family Dollar (NYSE: FDO) is scheduled to report Q3 EPS on July 8. FDO closed at $27.95. FDO July 27.5 straddle is priced at $2.30, August 27.5 straddle is priced at $3.50. FDO July option implied volatility is at 54, August is at 43; verses its 26-week average of 48; according to Track Data, suggesting decreasing price movement after EPS.

Pepsi Bottling (NYSE: PBG) closed at $33.80. PBG is scheduled to report Q2 EPS on July 8. PBG rejected PepsiCo (NYSE: PEP) offer of the equivalent of $29.50 per share for two-thirds of PBG stock it doesn't already own in PBG on May 4. PBG July option implied volatility is at 32; August is at 34; below its 26-week average of 42, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

When oil lost almost $3 a barrel, stock futures indicated a lower opening for today. Just shy of 5 AM, S&P 500, Down Jones, and Nasdaq 100 futures were all off 0.9%. The drop in oil to $64 a barrel has called into question any projections of a quick economic recovery -- as if high unemployment weren't enough. The Monday after any long weekend is hard, and this one's going to hurt.

The direction in which futures are pointing continues Thursday's equity declines in the United States, bringing the S&P 500 its third consecutive weekly loss. For the day, it lost 2.91%. The Dow Jones Industrial Average lost 2.63% of its value, with the Nasdaq Composite Index giving up 2.67%. Year-to-date, the DJIA is down 5.6%, the S&P 500 down 0.8%.

The second half of the calendar year has begun, and earnings return to the spotlight this week. As usual, Alcoa Inc. (NYSE: AA) is among the first of the S&P 500 to report quarterly results. For the second quarter in which Alcoa agreed to sell its wire harness and electrical distribution business and its fastening systems business expanded into Morocco, analysts surveyed by Thomson Reuters expect the New York-based aluminum producer to report swinging to a net loss of $0.34 per share from a profit of $0.66 per share in the year-ago period. Second quarter revenue is expected to have fallen 48.3% to $3.9 billion. The full-year forecast is currently for a loss of $1.04 per share and revenue of $16.7 billion (-38.0%). Alcoa has missed expectations in the past three quarters, by as much as 17 cents per share. The long-term EPS growth forecast is 10.0%, which is better than the sector average. Alcoa slashed its dividend earlier this year, and the First Call consensus recommendation remains to hold AA. However, TheStreet.com recommends it as an against-the-grain pick. At $9.86, shares are down 12.4% since the beginning of the year, and recently have been bumping up against the 200-day moving average.

As can be seen, if Stifel Nicolaus turns out to be right, then traders might have a winning transaction on their hands. But one thing that must be remembered is the arbitrage game going on here. Pepsi wants to buy Pepsi Bottling Group. The latter is, of course, arguing for a higher purchase price.

A study just released by the CMO Council and Pointer Media Network concludes that brand loyalty in the consumer packaged goods sector is taking a severe hit during this recession. Among its conclusions- 52% of customers who were considered highly loyal to a brand in 2007 either cut back or quit buying the brand in 2008. Less than half of the brands kept 50% or more of their highly loyal customers during that interval.

A full third of loyal customers of the average brand abandoned that brand altogether in 2008. One might say today's customers are fickle as well as frugal! The recession is also impeding the ability of leading brands to recruit new customers, meaning that the overall customer base of many contracted in 2008.

I've been pretty stunned by the rise in price. Usually, the stock is a sleepy thing that doesn't do much. Well, that's probably not entirely true, but if you've held the company in your portfolio as long as I've held it in mine, you know that it seems that way at least. I own Coke for the long-term because I love its dividend-paying characteristics. And I love its brand equity. I'm wondering, though, if Coke might make a good trade at the moment. Or, maybe I should start adding to my position before it takes too sharp a rise.

Dr Pepper Snapple Group (NYSE: DPS) popped open its first-quarter report on Wednesday (I bet you never read that pun before from a financial pundit covering a beverage concern!). On an adjusted basis, sales rose 4%. Management needed to adjust for the termination of a contract with Hansen (NASDAQ: HANS), as well as for currency effects. The company saw a drop in bottom-line income excluding items as earnings came in at $0.37 per share. This was $0.03 less than last year's performance.

However, Dr Pepper can feel happy about the fact that the company beat expectations. The market was only looking for $0.29 per share. How refreshing (yep, another pun)! Volumes did all right during the quarter.

• Citigroup upgraded Cooper Industries (NYSE: CBE) to Hold from Sell to reflect improving macro indicators and a belief negative earnings revisions are unlikely going forward. The firm raised its target price to $37 from $28.
  
• Royal Bank of Scotland upgraded Siemens (NYSE: SI) to Buy from Hold on expectations the company will benefit from an economic recovery.
  
• Banc of America/Merril upgraded State Street (NYSE: STT) to Buy from Neutral and raised their price target to $50 from $40 following stress test results that show the company does not need additional capital. The analyst said the news "clears one of the bars on capital concerns."
  
• Teradata (NYSE: TDC) was raised to Market Weight from Underweight at Thomas Weisel.
  
• Target (NYSE: TGT) was lifted to Overweight from Neutral at JP Morgan.
  
• Diageo (NYSE: DEO) was upgraded at UBS to Neutral from Sell.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Amazon.com Inc. (NASDAQ: AMZN) reported strong Q1 results easily beat expectations.
• Bank of America Corp. (NYSE: BAC) posted better-than-expected Q1 earnings, helped by home refinancing.
• Caterpillar Inc. (NYSE: CAT) reported its first quarterly loss since 1992 and cut its revenue outlook.
• Coca-Cola Co. (NYSE: KO) posted Q1 earnings that were in line with expectations, but shares fell.
• eBay Inc. (NASDAQ: EBAY) posted better-than-expected Q1 earnings despite a decline in sales.

Coca-Cola (NYSE: KO) reported first-quarter earnings on Tuesday morning. By the end of the day, the main enemy of PepsiCo (NYSE: PEP) was down 2.8% on better-than-average volume. Coke said that it earned 65 cents per share on an adjusted basis. According to Beth Gaston Moon's earnings preview, management met Wall Street's expectations.

So, right off the bat, you can see why the market wasn't so kind to Coke's shares. Meeting expectations isn't enough sometimes. But there are some other issues here, too.

Revenue was kind of soft, and a look at the statement of cash flows shows a decrease in money generated from operations. That number decreased over 20% to roughly $870 million.

We're in the heat of earnings season, with many of the top 100 S&P 500 companies reporting this week. One name that slightly fizzled at its earnings report today was PepsiCo Inc. (NYSE: PEP), which announced first-quarter net results of $1.14 billion, or 72 cents per share, a 0.9% decline from previous year's levels.

On the plus side, the per-share result was a nickel better than analysts were expecting, according to Thomson Reuters. Revenue, on the other hand, slipped 0.8% lower to $8.26 billion, falling shy of expectations for $8.28 billion.

While the numbers didn't exactly wow the Street (PEP shares are slightly lower in early trading), they also didn't illustrate a significant fall-off from the previous year, despite company warnings that the first half of 2009 would face challenging year-over-year comparisons amid rising commodity costs and shifting foreign exchange rates.