Dr Pepper Snapple gives downbeat profit outlook
From Market Watch:
Dr Pepper Snapple Group Inc. reported better-than-expected earnings in its latest quarter, as growing volumes in noncarbonated beverages continued to power results, but the drink company warned full-year profit could fall short of expectations.
Shares in the company, up 19% over the past 12 months, slipped 1% in premarket trading.
The Texas beverage company has in recent quarters logged solid growth in its portfolio of noncarbonated drinks, which includes tomato-and-seafood juice Clamato, Hawaiian Punch and Fiji bottled water. At the same time, Dr Pepper has managed to lift soda volume, even as rivals have been crimped by increasingly health-conscious consumers shifting to options perceived to be more natural and healthful.
Meanwhile, the company has benefited from having much less international exposure than its peers. Coca-Cola Co., for example, warned this month that adverse exchange rates would shave 5% off of its top line and 12% off of its bottom line in the first quarter.
But in the fourth quarter, the sharply stronger dollar took a bite out of Dr Pepper’s results, halving its overall rate of sales growth.
The company saw flat carbonated soft drink volume, offset by a 4% rise in noncarbonated beverage volume that was driven by Clamato and bottled water. The gain in noncarbonated drink volume matched the third-quarter rate; in the previous quarter, carbonated beverage volume rose 2%.