Dr Pepper Shares Soar
NEW YORK (AP) — Higher prices helped Dr Pepper Snapple Group's net income edge up 4 percent in the first quarter.
Prices and productivity improvements helped offset the company selling less of its drinks. Its results beat Wall Street expectations, and the company's shares jumped in morning trading.
Dr Pepper, based in Plano, Texas, makes Mott's juices, 7Up, Sunkist and Canada Dry in addition to its namesake drinks. The company said Wednesday that productivity improvements and a lower charge on inventory during the quarter helped offset higher costs for ingredients, such as apples.
But sales volume declined 2 percent, reflecting the industry's struggles to grow in developed markets where people are shying away from sugary drinks. Unlike its much bigger rivals Coca-Cola Co. and PepsiCo Inc., Dr Pepper relies far more heavily on North America for sales.
Given the sluggish growth in the U.S., the three companies have all been trying to streamline production and slash costs to improve profitability.
For the quarter, Dr Pepper said volume for its namesake soda fell 3 percent, reflecting declines in the core brand as well as Dr Pepper Ten, a newer diet soda that's marketed to men and has just 10 calories. The company has since introduced 10-calorie versions for its other sodas, including RC Cola, 7Up and Sunkist.
Volume for 7Up and Sunkist also declined, while Canada Dry and A&W saw increases.
In noncarbonated beverages, Hawaiian Punch volumes dropped 14 percent and Snapple fell 2 percent, while Mott's rose 11 percent.
For the three months ended March 31, Dr Pepper Snapple Group Inc. earned $106 million, or 51 cents per share. That's compared with $102 million, or 48 cents per share, a year ago.
Not including one-time items, the company said it earned 53 cents per share. That's above the 46 cents per share Wall Street expected, according to FactSet.
Revenue rose 1 percent, to $1.38 billion from $1.36 billion, in line with analyst estimates.
Shares of Dr Pepper gained $1.92, or 4 percent, to $49.68.
The Plano, Texas, company stood by its full-year guidance for sales growth of about 3 percent and adjusted earnings of $3.04 to $3.12 per share.