Dr Pepper Snapple 3Q Net Up 42% On Lower Costs, Volume Grows
DOW JONES NEWSWIRES
Dr Pepper Snapple Group Inc.'s (DPS) third-quarter earnings rose 42% amid
increased volume and lower packaging and ingredient costs.
Results beat analysts' expectation and the drinks company boosted the low end
of its 2009 earnings outlook while sees revenue declines toward the worst end of
its view.
International growth has bolstered larger rivals Coca-Cola Co. (KO) and Pepsi
Co Inc. (PEP) while U.S. soda sales have remained sluggish for some time, with
the recession adding to the pressure. Dr Pepper Snapple, which derives most of
its sales from the U.S., has aimed to expand the portfolio of beverages it owns
or distributes and earlier this year expected product and packaging changes will
help its higher-end Snapple brand resume growth toward year-end.
The maker of Snapple teas, Mott's apple juice and Dr Pepper soda reported a
profit of $151 million, or 59 cents a share, up from $106 million, or 41 cents a
share, a year earlier. Excluding items such as restructuring-related costs and
expenses related to it spinoff from Cadbury PLC (CBY), earnings rose to 54 cents
from 45 cents.
Net sales decreased 4% to $1.43 billion but rose 2% excluding foreign-exchange
impacts and the loss of Hansen Natural Corp. (HANS) product distribution. Volume
rose 4%.
Analysts polled by Thomson Reuters most recently forecast earnings of 49 cents
on revenue of $1.44 billion.
President and Chief Executive Larry Young said, "While the economy is showing
some signs of recovery, it's still too early to see this translate into higher
beverage sales."
Soda volume was up 4% from a year earlier and flat sequentially. On the
premium end, Snapple sales fell 6%, but improved sequentially for the second
straight quarter.
Shares closed Wednesday at $27.82 and didn't trade premarket. The stock is up
71% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com
(END) Dow Jones Newswires
11-05-090745ET
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