Dr Pepper forecasts profit below estimates; shares fall 6 percent
(Reuters) - Dr Pepper Snapple Group Inc (DPS.N) reported lower-than-expected quarterly results as sales volumes fell and the soft drink maker forecast profit for the current year below analysts' estimates.
Shares of the company, whose brands include 7UP, Sunkist and Hawaiian Punch, fell 6 percent to $42.41 in early trading on the New York Stock Exchange.
Coca-Cola Co (KO.N), the world's largest soft drink maker, on Tuesday reported lower-than-expected growth in worldwide sales volumes.
"Dr Pepper's results were pretty lackluster and the outlook didn't give investors much to get excited about," said Sanford C. Bernstein analyst Steve Powers.
Powers said Dr Pepper's selling, general and administrative expenses (SG&A) were a lot higher than expected and part of that was due to increased advertising.
The company expects a profit for the current year in a range of $3.04 to $3.12 per share and sales growth of about 3 percent, implying revenue of about $6.17 billion.
Analysts were looking for a profit of $3.20 per share on revenue of $6.17 billion.
"Their guidance seems to imply further SG&A inflation," Powers said.
The company reported SG&A expenses of $555 million for the quarter ended December 31, up from $553 million a year earlier.
Dr Pepper said total volumes declined 1 percent, with beverage concentrates declining the most.
On an adjusted basis Dr Pepper earned 82 cents per share, below the average analyst estimate of 85 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 2 percent to $1.48 billion, slightly below market estimates of $1.49 billion.
(Reporting By Maria Ajit Thomas in Bangalore, Editing by Saumyadeb Chakrabarty, Maju Samuel)