Dr Pepper Snapple Group Inc. offered upbeat guidance for the year after beating first-quarter expectations, thanks to rising demand for bottled water and growth in the company's fountain food service business.

Shares rose 1.9% in light premarket trading. Over the past 12 months, the stock has gained 14% through Tuesday's close.

The Plano, Texas-based beverage company has continued to post solid growth in its portfolio of noncarbonated drinks, featuring Fiji and Aguafiel bottled water and tomato-and-seafood juice Clamato. At the same time, Dr Pepper has managed to lift soda volume, despite shifting consumer preference for drink and food options that are perceived to be healthier and more natural.

Dr Pepper has managed to log higher volumes across its business, in contrast to its larger rivals. Coca-Cola Co. last week said growth slowed in the first three months of the year, with volumes flat as a weakening global economy and increasing consumer health-consciousness hurt sales. PepsiCo Inc., meanwhile, has reported trouble in China and cautioned over weakening markets across South America and parts of Europe.

In the first quarter, Dr Pepper logged 2% increases in both carbonated soft drink and noncarbonated beverage volumes. A 22% jump in water and a 10% rise in Clamato volume drove the gain in the latter category. In the carbonated segment, volume in the company's namesake brand rose 4% as Dr Pepper grew its footprint in restaurants and other food service businesses. Higher promotions helped drive higher demand for Schweppes and Crush brand drinks, increases that together offset declines in 7UP and other soda brands.

Dr Pepper said Mexico and the Caribbean continued to be bright spots, with volume rising 6% in those regions and faster than the 2% clip in the U.S. and Canada. As a result of its international exposure, which is far less than its rivals, unfavorable exchange rates hit sales by 2%.

In all, Dr Pepper reported a profit of $182 million, or 96 cents a share, up from $157 million, or 81 cents a share, a year earlier. Revenue edged 2.5% higher to $1.49 billion.

Analysts projected 86 cents in adjusted earnings per share on $1.47 billion in sales, according to Thomson Reuters.

For the year, Dr Pepper expects sales to rise 2%, higher than the 1% increase it had earlier predicted. The company said adjusted earnings per share are tracking at the high-end of its previously issued range of $4.20 to $4.30.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

 

(END) Dow Jones Newswires

April 27, 2016 09:25 ET (13:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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