Shares of Dr. Pepper Snapple (NYSE:DPS) surged to a 52-week high after the soda manufacturer revealed a first-quarter profit that toppled Wall Street estimates, driven primarily by gains in its beverage concentrates business.
The maker of drinks such as Sunkist, 7UP, Schweppes, Welches, Yoo-Hoo and Hawaiian Punch booked net income of $114 million, or 50 cents a share, compared with $89 million, or 35 cents a share, in the same quarter last year, beating the Street’s view of 46 cents.
Revenue for the Plano, Texas-based company was $1.33 billion, up from $1.25 billion a year ago, virtually matching average analyst estimates polled by Thomson Reuters of $1.31 billion.
“We're off to a solid start in 2011. The foundational investments we’ve made to strengthen this business are paying off,” Dr. Pepper CEO Larry Young said in a statement. “Through rapid continuous improvement, or RCI, we’re finding even more opportunities to free up resources to support growth.”
Despite significant escalations in commodity and fuel costs, Young said the company continues to manage the business for the long term by managing growth with pricing, mix and productivity.
Leading the sales growth was a 6.1% improvement to $155 million in its beverage concentrates segment. Latin American beverages were flat at $7 million while packaged beverages shrunk slightly to $109 million from $114 million in the year-earlier period.
Fueling the gains was solid volume growth and price increases, partially offset by higher packaging, ingredient and transportation costs.