Dr Pepper Snapple Group Inc.'s (DPS) second-quarter earnings
fell 13% as packaged beverage sales continued to weaken.
The beverage company also lowered its full-year sales estimate
to 2% growth from its February forecast of a 3% increase and backed
its core earnings guidance.
The company, whose brands include 7Up, Hawaiian Punch and Mott's
apple juice, has seen its sales pressured by declining demand for
soft drinks in the U.S. Dr Pepper Snapple, which gets the bulk of
its sales from the U.S. soft-drink market, is trying to overcome
the decline in full-calorie sodas by spending at least $30 million
this year to launch five more mid-calorie drinks, following the
introduction of Dr Pepper Ten last year.
Dr Pepper Snapple reported a profit of $155 million, or 76 cents
a share, down from $178 million, or 83 cents, a year earlier.
Excluding items such as unrealized commodity mark-to-market losses
and separation costs, core earnings fell to 84 cents a share from
85 cents. Sales declined 0.6% to $1.61 billion.
Analysts polled by Thomson Reuters had most recently forecast
per-share earnings of 84 cents on revenue of $1.64 billion.
Gross margin edged up to 58% from 57.7%.
Shipments, as measured by sales volume, declined 4%. Total
bottler-case-sales volume, which reflects beverages sold by the
company and its bottling partners, was down 3%.
Sales of packaged beverages, Dr Pepper Snapple's biggest segment
by revenue, decreased 2.5% to $1.15 billion. Beverage-concentrates
sales rose 1.5% to $336 million, while Latin America beverages
sales climbed 12% to $127 million.
Shares closed Tuesday at $47.68 and were inactive premarket. The
stock is up 7.9% so far this year.
Write to Melodie Warner at melodie.warner@dowjones.com
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