Dr Pepper Snapple Increases Sales 2 Percent In Fourth Quarter 2012

Dr Pepper Snapple Group, Inc. reported fourth quarter and full year 2012 results and raises quarterly dividend. The company reported earnings per share (EPS) of $0.81 compared to $0.77 in the prior year period. Excluding unrealized commodity mark-to-market losses in both years and certain items affecting comparability in the prior year period, Core EPS were $0.82 compared to $0.84 in the prior year.

For the quarter, reported net sales increased 2 percent reflecting favorable price/mix, partially offset by a 1 percent decline in sales volumes. Foreign currency added approximately 1 percentage point to net sales growth. Reported segment operating profit (SOP) increased 5 percent, or $19 million, as the contributions from net sales growth, ongoing productivity improvements and lower marketing investments were partially offset by planned increases in labor and benefits and a higher LIFO inventory provision of $6 million. The year ago quarter included an $18 million provision for a certain legal matter. Reported income from operations for the quarter was $292 million, including $1 million of unrealized commodity mark-to-market losses. Reported income from operations was $271 million in the prior year period, including $7 million of unrealized commodity mark-to-market losses and the previously disclosed legal provision.

For the year, reported net sales increased 2 percent. Reported income from operations was $1,092 million, compared to $1,024 million in the prior year period. For the year, the company reported earnings of $2.96 per diluted share compared to $2.74 per diluted share in the prior year period. Excluding a $17 million unrealized commodity mark-to-market gain in the current year and a $23 million unrealized commodity mark-to-market loss in the prior year period and certain items affecting comparability in both years, Core EPS were $2.92 compared to $2.85 in the prior year period.

DPS President and CEO Larry Young said in a prepared statement, “As I look back on 2012, I am proud of the team’s continuing ability to outperform the CSD category, growing dollar share as measured by Nielsen and closing distribution gaps across CSDs, teas and juices.”

Young continued, “Our employees have embraced Rapid Continuous Improvement (RCI), and it continues to drive tangible operational and financial improvements. Moving forward, nothing is more important than reinvigorating the CSD category and giving lapsed consumers a reason to come back to the brands they know and love. Our new TEN platform provides consumers the great taste and full mouth-feel of a regular CSD, but with only 10 calories per 12 ounce serving. These products have been well-received by both consumers and our retail and bottling partners and, collectively with Dr Pepper TEN, give us great confidence that we can bring excitement and lapsed users back to the category.”

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