Non-alcoholic beverages maker Dr Pepper Snapple Group, Inc. (DPS) said Thursday that pricing actions and a 4% sales volume growth helped the company report higher earnings for the third quarter. Adjusted earnings per share grew from last year and beat analysts' estimate by five cents. The company also raised its earnings guidance for the full year, but expects net sales for the year to be down 3% to 4%.
Net income for the quarter was $151 million or $0.59 per share, higher than $106 million or $0.41 per share in the same quarter last year. Latest quarter results included $0.05 per share of separation-related tax items.
Net income, excluding items, was $0.54 per share compared to $0.45 per share last year. On an average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the quarter. Analysts' estimates typically exclude special items.
The Plano, Texas-based soft drink company's quarterly net sales were $1.43 billion, down 4% from $1.49 billion in the prior year quarter. The company noted that net sales increased 2% on a currency neutral basis and excluding the loss of Hansen product distribution. Five analysts had consensus revenue estimate of $1.44 billion for the quarter.
Dr Pepper has three operating segments: Beverage Concentrates, Packaged Beverages, and Latin America Beverages.
Net sales from Beverage Concentrates increased to $260 million from $231 million in the previous year, helped by a 7% sales volume growth due to expanded Crush distribution and favorable comparisons to certain discounts in the prior-year period.
Packaged Beverages net sales declined to $1.08 billion from $1.15 billion in the prior year, reflecting a 1% decline in sales volume. Price increases in CSDs and Snapple, taken earlier in the year, were offset by the impact of negative mix, the company said.
Net sales from Latin America Beverages were $97 million, compared to $114 million in the comparable period.
In the preceding second quarter, the company reported net income of $158 million or $0.62 per share, higher than $108 million or $0.42 per share in the prior-year second quarter. Net sales for the second quarter declined 4% to $1.48 billion from $1.55 billion in the same quarter last year.
For the nine month period, net income was $441 million or $1.73 per share, up from $309 million or $1.21 per share in the comparable period. Excluding distribution agreement changes, separation-related costs, and restructuring items, year-to-date earnings were $1.53 per share, compared to $1.46 per share last year. Year-to-date, net sales declined to $4.18 billion from $4.33 billion in the prior year.
Among others in the industry, Coca-Cola Enterprises Inc. (CCE) posted third-quarter net income of $247 million or $0.50 per share, higher the prior-year's $214 million or $0.44 per share, as lower costs offset a 3% drop in operating revenues due to lower volume. Net operating revenues decreased to $5.57 billion from $5.74 billion in the prior-year period.
Pepsi Bottling Group Inc. (PBG), a distributor of Pepsi-Cola beverages, reported higher third-quarter profit, driven by tax audit settlement and mark-to-market related gains. Net income attributable to the company was $254 million or $1.14 per share, compared with $231 million or $1.06 per share last year. Meanwhile, net revenues dropped 5% to $3.63 billion from $3.81 billion in the previous year, reflecting lower volume. On a currency neutral basis, the company's worldwide revenue increased 2%.
The Purchase, New York-based PepsiCo Inc. (PEP) reported higher third-quarter profit, totaling $1.72 billion or $1.09 per share, compared to $1.58 billion or $0.99 per share in the year-ago period, helped by productivity and cost control across its businesses. However, net revenues edged down 1.5% to $11.08 billion from $11.24 billion reported in the previous year.
Looking ahead, for the full year, Dr Pepper raised its earnings outlook to a range of $2.12 to $2.16 per share from the previous range of $2.03 to $2.11 per share. Excluding net gains related to distribution agreement changes and separation-related tax items, the company now expects 2009 earnings to be in the range of $1.92 - $1.96 per share, compared to prior range of $1.88 - $1.96 per share.
Dr Pepper now expects full year 2009 net sales to be down 3% to 4%, compared to the prior range of 2% to 4%. Excluding the loss of Hansen product distribution and on a currency neutral basis, the company now continues to expects net sales to grow approximately 2%.
Street analysts currently expect Dr Pepper to earn $1.97 per share on revenues of $5.55 billion for the year.
DPS is currently trading at $26.86 per share, up 3.45%, on the New York Stock Exchange.
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