Research Desk Line-up: SodaStream Intl. Post Earnings Coverage
LONDON, UK / ACCESSWIRE / August 11, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Dr Pepper Snapple Group, Inc. (NYSE: DPS) ("DPS"), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=DPS, following the Company's reporting of its second quarter fiscal 2017 results on July 27, 2017. The maker of beverages such as 7Up, Sunkist, and Mott's reported a 4% increase in volume, while its core earnings remained flat on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the Beverages - Soft Drinks industry. Pro-TD has currently selected SodaStream International Ltd (NASDAQ: SODA) for due-diligence and potential coverage as the Company announced on August 02, 2017, its financial results for Q2 2017 which ended on June 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on SodaStream Intl. when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on DPS; also brushing on SODA. With the links below you can directly download the report of your stock of interest free of charge at:
http://protraderdaily.com/optin/'symbol=DPS
http://protraderdaily.com/optin/'symbol=SODA
Earnings Reviewed
For the quarter ended June 30, 2017, DPS's sales volumes increased 4% on a y-o-y basis, inclusive of the Bai's acquisition. The Company's reported net sales increased 6% to $1.80 billion, including the Bai's acquisition, which accounted for just over 1% of net sales growth. The Company's revenue numbers topped analysts' expectations of $1.77 billion.
During Q2 2017, DPS's gross profit increased to $1.08 billion compared to $1.03 billion in Q2 2-16. The Company's core gross profit margin increased 70 basis points to 60.4% attributed to the flow-through from organic net sales growth and $33 million of incremental gross profit from the Bai's acquisition. DPS's selling, general, and administrative expenses (SG&A) increased $93 million on a y-o-y basis during the reported quarter. The acquisition of Bai added $40 million, including $20 million in marketing investments, and $1 million of transaction expenses. The Company's core SG&A increased $74 million in Q2 2017.
DPS reported income from operations declined by 9% to $373 million. The unfavorable comparison of unrealized commodity mark-to-market activity contributed $37 million of this decline, and the acquisition of Bai reduced reported income from operations by $10 million. The Company's core income from operations of $386 million was essentially flat compared to the prior year.
DPS reported earnings of $1.02 per share in Q2 2017, which included a $0.18 per diluted share loss on early extinguishment of debt, compared to earnings of $1.39 per share in Q2 2016. The Company's core EPS were $1.25 in the reported quarter, flat versus prior year, but came in below Wall Street's expectations of $1.28 per share.
Segment Results
During Q2 2017, DPS's bottler case sales (BCS) volume increased 3%, with carbonated soft drinks (CSDs) increasing 3% and non-carbonated beverages (NCBs) increasing 5%. By geography, US and Canada volume increased 3%, and Mexico and the Caribbean volume increased 6%.
In CSDs, Dr Pepper increased 2% on a y-o-y basis driven by growth in both regular and diet. Canada Dry grew by 6% and Schweppes grew by 4%, both on continued growth in the ginger ale and sparkling water categories. 7UP increased 5%, growing in both the US and the Caribbean.
In NCBs, Clamato grew 3% and Mott's increased 2% on growth in sauce. Bai increased 118% on the acquisition and continued growth in the Company's existing distribution.
DPS's Beverage Concentrates' net sales increased 4% in Q2 2017 on a 2% increase in concentrate shipments and concentrate price increases taken earlier in the year. Lower discounts further increased net sales as the result of favorable trade accrual adjustments in the quarter. SOP increased 3% driven by net sales growth, which was partially offset by increases in marketing investments due to marketing accrual adjustments.
Cash Flow
On a year-to-date basis, DPS generated $410 million of cash from operating activities compared to $428 million in the prior year's same period. The Company's capital spending had totaled $41 million in the reported quarter compared to $68 million in the prior year's corresponding period. DPS returned $381 million to shareholders in the form of stock repurchases of $177 million and dividends of $204 million.
Outlook
For FY17, DPS is forecasting organic volume growth of approximately 1%. The Company's total volume growth is expected to be approximately 2%, inclusive of the Bai's acquisition, which closed on January 31, 2017.
DPS' net sales growth is expected to be about 4.5% for FY 2017, including the Bai's acquisition, which is still projected to add approximately 2% to growth. The Company continues to expect to repurchase shares of its common stock of $450 million to $500 million. DPS is estimating FY17 Core EPS in the range of $4.56 to $4.66.
Stock Performance
On Thursday, August 10, 2017, the stock closed the trading session at $90.38, slightly up 0.07% from its previous closing price of $90.32. A total volume of 864.78 thousand shares have exchanged hands. Dr Pepper Snapple's stock price advanced 1.23% in the last one month. The stock is trading at a PE ratio of 21.69 and has a dividend yield of 2.57%. The stock currently has a market cap of $16.46 billion.
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