Dr Pepper Snapple Group Inc.
) is set to report fourth-quarter and fiscal 2013 results on Feb
12, before the market opens. Last quarter, it delivered a
positive earnings surprise of 6.02%. Let's see how things are
shaping up for this announcement.
Factors to Consider this Quarter
Dr Pepper's top line has been weak since the past 5-6 quarters
due to disappointing volume trends of its carbonated beverages
(CSD). Changing consumer preferences, increasing health
consciousness and rising obesity concerns, possible new taxes on
sugar-sweetened beverages and growing regulatory pressures have
tremendously pressurized the CSD category in North America. These
category headwinds are significantly affecting the beverage
company's CSD volumes, which comprise around 80% of its
The situation is not expected to improve much in the fourth
quarter and CSDs are expected to continue to suffer due to
However, profits could be better in the quarter due to an
expected LIFO inventory benefit of approximately $8 million and
lower marketing costs. Marketing expenses are expected to decline
year over year in the quarter.
Our proven model does not conclusively show that Dr Pepper is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
(Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for
this to happen. That is not the case here, as you will see
The Earnings ESP is 0.00%.
Dr Pepper carries a Zacks Rank #4 (Sell). We caution against
stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into
the earnings announcement, especially when the company is seeing
negative estimate revisions momentum.
Other Stocks to Consider
Other stocks in the consumer staples sector that have both a
positive earnings ESP and a favorable Zacks Rank are:
ConAgra Foods, Inc.
), with Earnings ESP of +1.54% and a Zacks Rank #2 (Buy).
Mondelez International, Inc.
), with Earnings ESP of +2.27% and a Zacks Rank #3 (Hold).
),withEarnings ESP of +1.18% and a Zacks Rank #2.
CONAGRA FOODS (CAG): Free Stock Analysis
DR PEPPER SNAPL (DPS): Free Stock Analysis
LORILLARD CO (LO): Free Stock Analysis Report
MONDELEZ INTL (MDLZ): Free Stock Analysis
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