Dr Pepper Snapple Q3 Profit Tops View, But Sales Miss; Trims Sales Outlook

(RTTNews) - Non-alcoholic beverage maker Dr Pepper Snapple Group, Inc. (DPS) reported Wednesday a profit for the third quarter that increased from last year, reflecting a revenue growth and an income tax benefit.

Core earnings per share topped analysts' expectations, while quarterly revenues missed their estimates. The company also reaffirmed its core earnings guidance for the full-year 2013, while trimming annual revenue growth outlook.

"We've continued to invest in our brands for their long-term success, and I'm encouraged at this early date with the performance of our Core 4 TEN platform as research tells us that it is bringing consumers back to the category. Rapid Continuous Improvement continues to drive meaningful results and is enabling us to build an improved operating platform," President and CEO Larry Young said in a statement.

The Plano, Texas-based maker of Dr Pepper, 7UP, Mott's, Snapple, Canada Dry reported net income of $207 million or $1.01 per share for the third quarter, higher than $179 million or $0.84 per share in the prior-year quarter. Excluding items, core earnings was $0.88 per share, compared to last year's $0.79 per share.

On average, 14 analysts polled by Thomson Reuters estimated earnings of $0.83 per share for the quarter. Analysts' estimates usually exclude special items.

Net sales for the quarter edged up 1 percent to $1.54 billion from $1.53 billion in the same quarter last year on 3 percentage points positive impact of favorable pricing and mix, partially offset by a 1 percent decline in sales volumes and higher discounts.

Sales missed eleven Wall Street analysts' consensus estimate of $1.56 billion by a whisker.

Net sales for beverage concentrates grew 2 percent, while packaged beverages net sales remained flat with last year. Net sales for Latin America beverages improved 12 percent from a year ago.

Total bottler case sales volume for the quarter remained flat with last year as volumes of carbonated soft drinks also remained flat and non-carbonated beverages decreased 1 percent. Volumes also declined 1 percent in the U.S. and Canada, but grew 6 percent in the Caribbean and Mexico.

"We continue to operate in an extremely challenging environment, with significant pressures in the CSD category now impacting both regular and diet products. Against this backdrop, our teams remained committed to executing our strategy and we continued to gain volume share while holding value share in the CSD category," Young added.

Looking ahead to fiscal 2013, the company said it continues to expect core earnings in the range of $3.04 to $3.12 per share. However, it now projects annual net sales to be about flat with last year, implying sales of $6.0 billion, compared to the prior forecast for a growth of about 2 percent.

Street is currently looking for full-year 2013 earnings of $3.07 per share, on revenue growth of 1.3 percent to $6.07 billion.

Looking ahead, Young said, "With our portfolio of consumer-loved brands, our strong execution focus and our continuous improvement mindset, I am confident we can deliver our profit goals for 2013."

In Wednesday's regular trading session, DPS is currently trading at $46.55, down $1.18 or 2.60% on a volume of 0.74 million shares.