Dr Pepper Snapple Group Earnings: Margins Shrink Again, but Net Income Climbs
S&P 500 (NYSE:SPY) component Dr Pepper Snapple Group Inc. (NYSE:DPS) reported its results for the second quarter. Dr Pepper Snapple Group manufactures and distributes flavored carbonated soft drinks and non-carbonated beverages in North America.
Investing Insights: Is TV the Next Bullish Catalyst for Apple’s Stock?
Dr Pepper Snapple Group Inc. Earnings Cheat Sheet
Results: Net income for Dr Pepper Snapple Group Inc. rose to $178 million (83 cents per share) vs. $172 million (77 cents per share) in the same quarter a year earlier. This marks a rise of 3.5% from the year-earlier quarter.
Revenue: Rose 2.5% to $1.62 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: Dr Pepper Snapple Group Inc. beat the mean analyst estimate of 82 cents per share. Analysts were expecting revenue of $1.63 billion.
Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 0.4 percentage point to 57.7% from the year-earlier quarter. In that span, margins have contracted an average of two percentage points per quarter on a year-over-year basis.
Revenue has increased for four quarters in a row. Revenue increased 2.3% to $1.36 billion in the first quarter. The figure rose 3.5% in the fourth quarter of the last fiscal year from the year earlier and climbed 4.9% in the third quarter of the last fiscal year from the year-ago quarter.
The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of 46 cents versus a mean estimate of net income of 48 cents per share.
The increase in profit last quarter comes after net income fell in the previous quarter. In the first quarter, net income declined 10.5% to $102 million.
Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the third quarter has risen to 79 cents per share from 77 cents. For the fiscal year, the average estimate has moved up from $2.93 a share to $2.95 over the last seven days.
Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
Don’t Miss These Hot Additional Stories: