Dr. Pepper Snapple Hits All-Time High on Strong Q1 Profit

Andrew Klips |

Dr. Pepper Snapple Group, Inc. (DPS), the third largest soft drink maker in the U.S., reported on Wednesday that profits in the first quarter were better than analysts expected, helped in part by the launch of its new 10-calorie sodas, price increases and less discounting, offsetting 4 percent lower sales volume.

The Plano, Texas-based company said net sales rose slightly from $1.36 billion in the first quarter of 2012 to $1.38 billion in the latest quarter. Net income increased to $106 million, or 51 cents per share, compared to $102 million, or 48 cents per share, in the year prior quarter. Excluding an unrealized commodity mark-to-market loss this year and an unrealized mark-to-market gain last year, core earnings were 53 cents in Q1 2013 and 46 cents in Q1 2012.

Revenue was a bit light of the $1.39 billion Wall Street was expecting, but the profits blew past the 46 cents per share that was predicted.

“Despite continued category headwinds, a fragile U.S. consumer and abnormally cold weather across the Northeast and Midwest, our business results remained solid for the quarter,” said Larry Young, president and chief executive at Dr Pepper Snapple. “The launch of the Core 4 and RC TEN platform is well underway, and we have seen some early success in the accounts where we currently have distribution.”

TEN, the company’s new drink line, began an advertising campaign in mid-March.

The company, which also makes brands like Dr Pepper, Sunkinst, 7UP, Snapple, Hawaiian Punch, Motts apple juice and more, vies for market share with larger peers Coca-Cola (KO) and PepsiCo (PEP). Last week, Coke and Pepsi both beat analysts’ earning expectations. Coke reported EPS of 46 cents (analysts predicted 45 cents), while Pepsi earned 77 cents per share (analyst predicted 71 cents).

In March, Dr Pepper Snapple agreed to repurchase distribution rights from Mondelez International (MDLZ) related to Snapple and other beverages in portions of the Asia-Pacific region.

Looking ahead, Dr Pepper Snapple said that it still expects net sales growth of about 3 percent for all of 2013 compared to last year. EPS is expected in the range of $3.04 to $3.12, not including any impact of commodity mark-to-market gains and losses.

Shares of DPS gapped ahead to start the day’s trading, setting a new all-time high at $50.29. Trading has cooled-off some as the day winds towards a close, but shares are still higher today than any other day in the company’s history, holding around $48.70 for 2 percent gains on the day.

In the past 12 months, shares of DPS are up approximately 26 percent.

[Image via serious eats]

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
PEP Pepsico Inc. 100.60 1.57 1.59 4,594,602
MDLZ Mondelez International Inc. 41.17 0.33 0.81 7,444,617
DPS Dr Pepper Snapple Group Inc 85.13 -0.07 -0.08 1,926,530
KO Coca-Cola Company (The) 40.36 0.19 0.47 11,176,301
SF Stifel Financial Corporation 49.53 -1.40 -2.75 350,114

Comments

Emerging Growth

Relevium Technologies Inc.

Relevium Technologies Inc is engaged in the acquisition of products, technologies and businesses relating to musculoskeletal function, specifically Pain Relief, Injury Recovery and Active Performance.

Private Markets

Ozobot by Evollve Inc

Ozobot is a world leader in compact super intelligent robots that entertain and educate through fun interactive gaming.

Lyft

Lyft matches drivers using their own personal vehicles with passengers who request rides through the smartphone app, and the passengers pay automatically through the app. When using Lyft, passengers have…