Updated from 1:05 p.m. EDY.
In trying times, consumers gulp down the cheapest drinks they can get their cash-strapped hands on. That, at least, is the upshot of today's quarterly earnings report from Dr Pepper Snapple.
Value brands like Hawaiian Punch and Crush propelled
Dr Pepper Snapple's
better-than-expected earnings, while more costly drinks, in particular Snapple, suffered during the first quarter.
The company raised its full-year outlook, sending its shares bubbling up by 3% to $21.89 in afternoon trading.
Deutsche Bank analyst Andrew Kieley raised his 2009 earnings-per-share estimates on the news, telling clients in a note that he expects second-half 2009 results to surpass the first. Kieley raised his earnings-per-share estimate for 2009 to $1.75 from $1.65 and boosted his price target to $24 from $22.
He said the drink maker's sales volume and profits rose faster than expected in the year to date, giving more evidence of its potential for growth.
Dr Pepper, whose other brands include A&W, 7UP and Canada Dry, said first-quarter net income grew 39% to $132 million, or 52 cents a share, from $95 million, or 38 cents a share, a year earlier.
Excluding one-time items, earnings were 37 cents, still far surpassing analysts' target of 29 cents.
Sales fell 3% to $1.26 billion.
For the full year, Dr Pepper said it expected earnings of $1.70 to $1.78 a share, up from its prior forecast of $1.59 to $1.67.
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