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TheStreet Open House

Dr Pepper Snapple Group Reports Third Quarter 2012 Results

Dr Pepper Snapple Group, Inc. (NYSE: DPS) reported third quarter 2012 EPS of $0.84 compared to $0.71 in the prior year period. Excluding $18 million of unrealized commodity mark-to-market gains in the current year and $11 million of unrealized commodity mark-to-market losses in the prior year period, Core EPS were $0.79 compared to $0.74 in the prior year. Year-to-date, the company reported earnings of $2.15 per diluted share compared to $1.97 per diluted share in the prior year period. Excluding certain items affecting comparability and an unrealized commodity mark-to-market gain in the current year and a $16 million unrealized commodity mark-to-market loss in the prior year period, Core EPS were $2.10 compared to $2.02 in the prior year period.

For the quarter, reported net sales were flat. Shipment volumes were down 3%. Product and package price/mix was up 4%, while volume mix shift across the segments lowered net sales by 1%. Reported segment operating profit (SOP) increased 3%, or $10 million, as the contributions from favorable price/mix were partially offset by lower volumes and a $9 million increase in marketing investments. Foreign currency reduced net sales by less than 1% in the quarter and lowered SOP by 1 percentage point. Reported income from operations for the quarter was $308 million, including $18 million of unrealized commodity mark-to-market gains. Reported income from operations was $261 million in the prior year period, including $11 million of unrealized commodity mark-to-market losses.

Year-to-date, reported net sales increased 2%. Reported income from operations was $800 million, including $18 million of unrealized commodity mark-to-market gains compared to $753 million in the prior year period, including $16 million of unrealized commodity mark-to-market losses. Reported net income was $459 million compared to $440 million in the prior year period.

DPS President and CEO Larry Young said, “We continue to operate in an uncertain economic and cautious consumer environment. I am proud of the team’s commitment to execute our focused strategy of driving profitable volume through disciplined pricing and continued investment in our brands to drive relevance and awareness with our consumers. Rapid continuous improvement (RCI) is gaining momentum across the organization and is delivering improvements in operating profitability and cash flow, resulting in returns for our shareholders.”

   
EPS reconciliation Third Quarter Year-to-Date
    2012       2011   Percent

Change

    2012       2011   Percent

Change

Reported EPS $ 0.84   $ 0.71   18 $ 2.15   $ 1.97   9
 
Unrealized commodity mark-to-market net (gain)/loss (0.05 ) 0.03 (0.05 ) 0.05
 
Items affecting comparability

- Foreign deferred tax benefit

- - (0.02 ) -

- Depreciation adjustment on capital lease

- - 0.02 -

 

------ ------ ------ ------ ------ ------

Core EPS

  $ 0.79     $ 0.74   7   $ 2.10     $ 2.02   4

EPS – earnings per share

 

Net sales and SOP in the tables and commentary below are presented on a currency neutral basis. For a reconciliation of non-GAAP to GAAP measures see pages A-5 through A-9 accompanying this release.

   
Summary of 2012 results

(Percent change)

As Reported Currency Neutral
  Third

Quarter

  YTD   Third

Quarter

  YTD
BCS Volume   (3 )   (1 )   (3 )   (1 )
Sales Volume   (3 )   (2 )   (3 )   (2 )
Net Sales   -     2     -     2  
SOP   3     1     4     2  

BCS - bottler case sales

 

BCS Volume

For the quarter, BCS volume declined 3% with carbonated soft drinks (CSDs) declining 2% and non-carbonated beverages (NCBs) declining 5%.

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