Dr Pepper Snapple Group Inc. Earnings: Beats the Street on Profit Rise

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 Earnings Cheat Sheet for the Third Quarter

Results: Net income for Dr Pepper Snapple Group Inc. rose to $154 million (71 cents per share) vs. $144 million (60 cents per share) in the same quarter a year earlier. This marks a rise of 6.9% from the year earlier quarter.

Revenue: Rose 4.9% to $1.53 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: DPS beat the mean estimate of 71 cents per share. Analysts were expecting revenue of $1.53 billion.

Quoting Management: DPS President and CEO Larry Young said, “As we continue to operate in challenging times, I remain pleased with the performance of our portfolio. Our teams are committed to executing our focused strategy with the goal of providing value to our customers while managing price, mix and productivity to offset higher input costs. The national launch of Dr Pepper TEN is bringing excitement and energy to the Dr Pepper trademark, and we are continuing to build per capita consumption with new fountain availabilities and cold drink placements. Our rapid continuous improvement efforts are gaining traction across the organization, and we’re beginning to experience meaningful results.”

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 2.8 percentage points to 56% from the year earlier quarter. Over that time, margins have contracted on average 1.6 percentage points per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 4.1% to $1.58 billion in the second quarter. The figure rose 6.7% in the first quarter from the year earlier and climbed 4.1% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company beat estimates last quarter after being in line with expectations in the second quarter with net income of 77 cents per share.

Net income has increased 4.5% year over year on average across the last five quarters. The biggest gain came in the first quarter, when income climbed 28.1% from the year earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from 74 cents a share to 77 cents over the last ninety days. For the fiscal year, the average estimate has moved down from $2.75 a share to $2.74 over the last ninety days.

Competitors to Watch: The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NYSE:PEP), Hansen Natural Corporation (NASDAQ:HANS), Coca-Cola Enterprises Inc. (NYSE:CCE), Cott Corporation (NYSE:COT), Jones Soda Co. (NYSE:USA) (NASDAQ:JSDA), National Beverage Corp. (NASDAQ:FIZZ), Celsius Holdings, Inc. (NASDAQ:CELH), Reed’s, Inc. (NASDAQ:REED), and Heckmann Corporation (NYSE:HEK).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)