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]
