Beverage maker Dr Pepper Snapple Group Inc cut its full-year forecast as it expects to take a charge in the third quarter following a default by a company supplying resin to its Mexican operations.
Pepper Snapple also said its operations were impacted by hurricanes affecting certain parts of the United States, the Caribbean and the Sept. 19 earthquake in Mexico, but was unable to determine the impact to its results.
The company said it had procured enough supplies to cover its resin needs, but expected to write off certain prepaid resin inventory. The default had occurred at the supplier's resin plant.
The write off is expected to impact current-quarter operating income by $7 million to $9 million and profit by $0.03 per share, Pepper Snapple said on Wednesday.
Analysts on average expect Pepper Snapple to earn $1.19 per share in the third quarter, according to Thomson Reuters I/B/E/S.
The company cut its 2017 earnings forecast to $4.53-$4.63 per share, from $4.56-$4.66 per share it had estimated in July.
Pepper Snapple's warning comes a few weeks after consumer products maker Newell Brands Inc cut its adjusted profit outlook for the year, citing higher costs due to a shortage of resin used in its products after suppliers shut factories due to hurricanes Harvey and Irma.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Shounak Dasgupta)