Dr Pepper Snapple Tops Expectations

Dr Pepper Snapple Group Inc. reported better-than-expected profit and revenue growth in its first quarter, helped again by growing volumes in noncarbonated beverages.

The Plano, Texas, company has enjoyed recent growth in soda volume while rivals have suffered as increasingly health-conscious consumers shift away from soda. Dr Pepper, whose portfolio also includes Hawaiian Punch and Clamato, among others, is also benefiting from less overseas exposure than its peers.

In the latest quarter, its was noncarbonated beverages that drove results. The category posted a 3% volume improvement as Snapple volume jumped 11% and water volume grew 5%. Earlier this week, rival Coca-Cola Co. similarly attributed second-quarter improvement to noncarbonated drinks.

Carbonated soft drink volume, meanwhile, rose 1% as the company's namesake soda brand's volume grew at a similar rate. A 6% increase in Squirt volume and an 8% rise in Schweppes were offset by mid-single digit volume declines in soda brands including 7UP and Sunkist, the company said.

Sales volumes rose 1%. Overall bottler-case sales volume—which reflects beverages sold by the company and its bottling partners—also increased 1%, or 2% when adjusted for currency fluctuations.

In all for the quarter ended June 30, Dr Pepper reported a profit of $220 million, or $1.14 a share, up from $210 million, or $1.06, a year earlier. Excluding a gain from an accounting adjustment, per-share profit rose to $1.13. Revenue edged 1.5% higher to $1.66 billion.

Analysts predicted $1.10 in earnings per share on $1.65 billion in revenue.

The company lifted its full-year guidance, now projecting earnings of $3.85 to $3.93 a share, up from its earlier view of $3.80 to $3.88.

Shares in the company, up about 34% over the past 12 months, were inactive premarket.

Write to Lisa Beilfuss at [e-mail]

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