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Dr Pepper Snapple Q4 Profits, Sales Edge Up, 'Ten' Launch Aims To Reinvigorate Sales

Posted On: 2/15/2013

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TAGS: Dr Pepper Snapple Group Inc., soft drink maker, DPS fourth quarter, Dr Pepper, 7UP, Snapple, Canada Dry, 10-calorie soda Ten, vending, vending machine, low-calorie soda

PLANO, TX -- Dr Pepper Snapple Group Inc., the nation's third-largest soft drink maker, saw fourth-quarter profits rise 2% and revenue increase 1% despite lower sales volumes. It's banking on the launch of a low-calorie soda to reinvigorate the category.

The Plano, TX-based maker of Dr Pepper, 7UP, Snapple and Canada Dry reported net income of $170 million, or 81¢ a share, up from $166 million, or 77¢ a share, in the same quarter a year earlier.

Sales for the three months ended Dec. 31 climbed 2% to $1.48 billion from $1.46 billion, but narrowly missed Wall Street expectations of $1.5 billion as volume slowed in all segments other than its Latin America Beverages group.

Net sales for beverage concentrates grew 2%, and packaged beverages net sales were flat with last year. In Latin America, net sales improved 11% from a year ago.

Total bottler case sales volume for the quarter remained level with last year as volumes of both soft drinks and noncarbonated beverages were flat. Volumes also remained flat in the U.S. and Canada, but grew 8% in the Caribbean and Mexico.

In a bid to reverse declining carbonated beverages sales, Dr Pepper Snapple Group announced the nationwide launch of a new 10-calorie soda line called "Ten."

It's aiming to bring "lapsed" users back to the carbonated soft drink category with the launch of Ten reformulations of 7Up, Sunkist, A&W, Canada Dry and RC -- rolling out nationally this year. DPSG chief executive Larry Young said the company plans to spend more than $30 million this year marketing the low-calorie line, which is formulated to have the taste and mouth-feel of their classic counterparts, but with only 10 calories per 12-fl.oz. serving.

Dr Pepper forecast fiscal 2013 sales growth of approximately 3% and earnings in the range of $3.04 to $3.12 a share.