Dr Pepper Snapple Group, Inc. Earnings: Margins Shrink as Costs Rise, Profit Falls
S&P 500 (NYSE:SPY) component Dr Pepper Snapple Group, Inc. (NYSE:DPS) reported its results for the second quarter. Dr Pepper Snapple Group, Inc. manufactures and distributes flavored carbonated soft drinks and non-carbonated beverages in North America.
Dr Pepper Snapple Group Earnings Cheat Sheet for the Second Quarter
Results: Net income for Dr Pepper Snapple Group, Inc. fell to $172 million (77 cents per share) vs. $183 million (74 cents per share) a year earlier. This is a decline of 6% from the year earlier quarter.
Revenue: Rose 4.1% to $1.58 billion from the year earlier quarter.
Actual vs. Wall St. Expectations: DPS fell in line with the mean analyst estimate of 77 cents per share. Analysts were expecting revenue of $1.59 billion.
Quoting Management: DPS President and CEO Larry Young said, “Once again our portfolio of leading, consumer-preferred brands demonstrated resilience despite continued macroeconomic and consumer pressures. Our teams remain committed to executing our focused strategy, ensuring our products are top of mind and close at hand. To cover higher input costs, we are raising prices and driving incremental productivity through our developing Rapid Continuous Improvement capabilities. We do so with a goal of delivering value to our customers and ensuring we’re investing for the long-term health of this business.”
Gross margin shrank 2.8 percentage points to 58.2%. The contraction appeared to be driven by increased costs, which rose 11.6% from the year earlier quarter while revenue rose 4.1%.
Revenue has risen the past four quarters. Revenue increased 6.7% to $1.33 billion in the first quarter. The figure rose 4.1% in the fourth quarter of the last fiscal year from the year earlier and climbed 1.6% in the third quarter of the last fiscal year from the year-ago quarter.
The company fell in line with estimates last quarter after topping expectations in the previous two quarters. In the first quarter, it topped the mark by 4 cents, and in the fourth quarter of the last fiscal year, it was ahead by 3 cents.
Net income has increased 6.3% year over year on average across the last five quarters. The biggest gain came in the first, when income climbed 28.1% from the year earlier quarter.
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).
(Source: Xignite Financials)