Dr Pepper Snapple Earnings: Margins Expand as Net Income Rises

S&P 500 (NYSE:SPY) component Dr Pepper Snapple Group Inc. (NYSE:DPS) reported net income above Wall Street’s expectations for the third quarter. Dr Pepper Snapple Group manufactures and distributes flavored carbonated soft drinks and non-carbonated beverages in North America.

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Dr Pepper Snapple Group Inc. Earnings Cheat Sheet

Results: Net income for Dr Pepper Snapple Group Inc. rose to $179 million (84 cents per share) vs. $154 million (71 cents per share) in the same quarter a year earlier. This marks a rise of 16.2% from the year-earlier quarter.

Revenue: Remained constant at $1.53 billion.

Actual vs. Wall St. Expectations: Dr Pepper Snapple Group Inc. beat the mean analyst estimate of 77 cents per share. It fell short of the average revenue estimate of $1.63 billion.

Quoting Management: DPS President and CEO Larry Young said, “We continue to operate in an uncertain economic and cautious consumer environment. I am proud of the team’s commitment to execute our focused strategy of driving profitable volume through disciplined pricing and continued investment in our brands to drive relevance and awareness with our consumers. Rapid continuous improvement (NYSE:RCI) is gaining momentum across the organization and is delivering improvements in operating profitability and cash flow, resulting in returns for our shareholders.”

Key Stats:

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of 85 cents versus a mean estimate of net income of 82 cents per share.

Net income has increased 12.9% year-over-year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed 48.2% from the year-earlier quarter.

Last quarter, gross margins grew to 59%, a three percentage points difference from the year-earlier quarter. This breaks a streak of two consecutive quarters of shrinking margins.

Over the last five quarters, revenue has increased 2.6% on average year-over-year. The biggest increase came in the third quarter of the last fiscal year, when revenue rose 4.9% from the year-earlier quarter.

Looking Forward: The average estimate for the fourth quarter remains unchanged at 87 cents a share. For the fiscal year, the average estimate has moved up from $2.95 a share to $2.96 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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