Dr Pepper Snapple (DPS) Q2 Earnings Lag, Sales Top Estimates

Plano, TX-based Dr Pepper Snapple Group Inc. (DPS - Free Report) recently reported second-quarter 2017 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same.

Earnings & Revenues

Second-quarter adjusted earnings per share of $1.25 missed the Zacks Consensus Estimate of $1.28 by 2.3%. Earnings were flat on a year-over-year basis.

Dr Pepper Snapple’s net sales of $1.8 billion surpassed the Zacks Consensus Estimate of $1.77 billion by 1.7%. Net sales rose 6% year over year driven by solid volume growth.

Volume Details

Dr Pepper Snapple’s sales volume is measured in two ways: 1) sales volume and 2) bottler case sales (BCS) volume. Sales volume represents concentrates and finished beverages sold to bottlers, retailers and distributors. BCS includes the sale of finished packaged beverages by the company and its bottlers to retailers and independent distributors.

Sales volume increased 4% in the quarter, inclusive of the Bai acquisition.

In the quarter, BCS volumes were 3%, more than 1% growth recorded in the previous quarter. During the quarter, Carbonated Soft Drink (CSDs) volumes increased 3%, while non-carbonated beverages (NCBs) volumes rose 5%.

Geographically, volumes in the U.S. and Canada increased 3%. Meanwhile, volumes rose 6% in Mexico and the Caribbean, higher than the previous quarter’s 3%.

Dr Pepper Snapple Group, Inc Price, Consensus and EPS Surprise

Dr Pepper Snapple Group, Inc Price, Consensus and EPS Surprise | Dr Pepper Snapple Group, Inc Quote

Segment Detail

Segment-wise, the company generated higher revenues at the Beverage Concentrates (up 4% year over year) and Packaged Beverages (6%) segments. Latin America Beverages segment revenues also increased 11% in the quarter owing to a 6% rise in sales volumes and favorable pricing.

Operating Highlights

Adjusted gross margin increased 70 basis points (bps) to 60.4%. Adjusted operating margin deteriorated 130 bps to 21.5%.

Financials

Cash and cash equivalents were $286 million as of Jun 30, 2017, compared with $1,787 million at 2016-end. Long-term obligations were $4,391 million, down from $4,468 million at 2016-end.

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