Dr Pepper Snapple Q4 Adj Profit Tops View, But Sales Miss, Issues Rosy Outlook

(RTTNews) - Non-alcoholic beverage maker Dr Pepper Snapple Group, Inc. (DPS) reported Wednesday a profit for the fourth quarter that declined from last year, reflecting pension plan related charges and a sales drop.

However, core earnings per share topped analysts' expectations, while quarterly sales missed their estimates by a whisker. The company also provided earnings guidance for the full-year 2013, above Street view.

"I am proud of the team's ability to remain focused and execute against our strategy during a challenging year. We continued to gain distribution and availability across our key brands and packages and grew volume share and held dollar share in the highly competitive CSD category," 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 $156 million or $0.78 per share for the fourth quarter, lower than $170 million or $0.81 per share in the prior-year quarter. Excluding items, core earnings was $0.97 per share, compared to last year's $0.82 per share.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.85 per share for the quarter. Analysts' estimates usually exclude special items.

Net sales for the quarter edged down 1 percent to $1.46 billion from $1.48 billion in the same quarter last year, on a sales volume decline of 4 percent and less favorable trade adjustments, partially offset by favorable mix and price. Sales also missed eleven Wall Street analysts' consensus estimate of $1.47 billion by a whisker.

Net sales for beverage concentrates declined 4 percent and packaged beverages net sales were down 2 percent from last year. Meanwhile, net sales for Latin America beverages improved 8 percent or 9 percent in constant currency, from a year ago.

Total bottler case sales volume for the quarter declined 2 percent from last year as volumes of both soft drinks and non-carbonated beverages slipped 2 percent. Geographically, volumes also declined 2 percent in the U.S. and Canada, but grew 4 percent in the Caribbean and Mexico.

Operating margin for the quarter contracted 170 basis points to 18.0 percent from last year's 19.7 percent.

For fiscal 2013, the company reported net income of $624 million or $3.05 per share, compared to $629 million or $2.96 per share in the prior year. Excluding items, core earnings were $3.20 per share, compared to last year's $2.92 per share. Net sales for the full year remained relatively flat with last year at $6.0 billion.

Analysts expected the company to report full-year 2013 earnings of $3.09 per share on annual revenues of $6.02 billion.

Looking ahead to fiscal 2014, the company said it expects core earnings in a range of $3.38 to $3.46 per share, on projected annual net sales growth between flat and up 1 percent. Street is currently looking for full-year 2013 earnings of $3.27 per share, on revenue growth of 1.9 percent to $6.13 billion.

"As we move into 2014, our teams will continue to build the TEN platform with programming focused on driving awareness and trial, provide consumers with balanced beverage options and execute with excellence in the marketplace," Young added.

DPS closed Tuesday's regular trading session at $48.90, up $0.31 on a volume of 2.63 million shares. In the past 52-week period, the stock has been trading in a range of $42.10 to $50.37.