Dr Pepper Snapple Net Income Drops in 2Q
PLANO, Texas (AP) — Dr. Pepper Snapple Group Inc. said Wednesday that its net income declined 13 percent in the second quarter, hampered in part by higher commodity costs, bad weather and cautious consumer spending.
The maker of Sunkist, Canada Dry, its namesake drinks and other beverages also cut its full-year revenue forecast.
Dr. Pepper earned $155 million, or 76 cents per share, for the three months ended June 30. A year earlier it earned $178 million, or 83 cents per share.
Removing an accounting measure and other items, earnings were 84 cents per share. Adjusted earnings were 85 cents per share in the prior-year period.
This met the expectations of analysts polled by FactSet.
Revenue for the Plano, Texas, company dipped 1 percent to $1.61 billion from $1.62 billion. Wall Street was looking for higher revenue of $1.65 billion.
Total sales volume fell 4 percent as people continued to shy away from buying sugary drinks. Both beverage concentrates and packaged beverages posted a 5 percent decline in the metric. Latin America beverages reported a 2 percent increase.
The bottler case sales volume for carbonated soft drinks dropped 3 percent, while it declined 2 percent for non-carbonated beverages. One bright spot was that the volume for Snapple beverages rose 4 percent. It climbed 2 percent for Mott's juices.
Bottler case sales volume for the U.S. and Canada fell 4 percent, while Mexico and the Caribbean reported a 2 percent rise.
Dr. Pepper said that commodity costs mostly related to apples climbed in the quarter. It also boosted marketing spending by $9 million and dealt with a $4 million audit charge.
President and CEO Larry Young said in a statement that unseasonably cold and wet weather hurt business.
Dr. Pepper now foresees 2013 revenue growth of approximately 2 percent, down from a prior prediction for an approximately 3 percent rise. It still expects full-year adjusted earnings of $3.04 to $3.12 per share.
Analysts forecast earnings of $3.09 per share.
Its shares finished at $47.68 on Tuesday.