By Melodie Warner
Dr Pepper Snapple Group Inc.'s (DPS) first-quarter earnings rose
3.9% as the beverage company's sales improved despite lower
shipments.
The company, whose brands include 7Up, Hawaiian Punch and Mott's
apple juice, has seen its profits pressured by declining demand for
soft drinks in the U.S. and higher costs for packaging and
ingredients. Dr Pepper Snapple, which gets the bulk of its sales
from the U.S. soft-drink market, has warned its earnings will take
a hit this year as it plans a big marketing campaign for the
rollout of more low-calorie sodas.
Dr Pepper Snapple also agreed last month to repurchase the
distribution rights for Snapple and several other noncarbonated
beverage brands in parts of Asia-Pacific from Mondelez
International Inc. (MDLZ).
Dr Pepper Snapple reported a profit of $106 million, or 51 cents
a share, up from $102 million, or 48 cents a share, a year earlier.
Excluding items such as unrealized commodity mark-to-market losses
or gains, core earnings rose to 53 cents a share from 46 cents.
Sales increased 1.3% to $1.38 billion.
Analysts polled by Thomson Reuters had most recently forecast
per-share earnings of 46 cents on revenue of $1.39 billion.
Gross margin edged up to 57.2% from 57.1%.
Shipments, as measured by sales volume, declined 2%. Total
bottler-case-sales volume, which reflects beverages sold by the
company and its bottling partners, was down 2%.
Sales of packaged beverages, Dr Pepper Snapple's biggest segment
by revenue, were flat at $1.02 billion. Beverage-concentrates sales
rose 3.5% to $263 million, while Latin America beverages sales
climbed 8.8% to $99 million.
Shares of the company, which also backed its full-year guidance,
closed Tuesday at $47.78.
Write to Melodie Warner at melodie.warner@dowjones.com
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