Will 1Q15 Earnings for Dr Pepper Snapple Surprise Wall Street?
Dr Pepper Snapple, a 1Q15 Earnings Preview: Can the Doctor Outdo the Soda Behemoths? (Part 2 of 5)
First quarter earnings
The top three soda makers in the United States are Coca-Cola (KO), PepsiCo (PEP), and Dr Pepper Snapple (DPS). The 1Q15 results for these top soda makers are lined up for release on April 21, 22, and 23, respectively. These companies together account for ~1.8% of the SPDR S&P 500 ETF (SPY).
Snapshot of 2014 performance
Dr Pepper Snapple exceeded analysts’ expectations in the first three quarters of 2014 and was in line with analysts’ estimates in 4Q14. Dr Pepper Snapple’s 4Q14 adjusted EPS (earnings per share), which excludes the impact of one-time items, declined by 9.3% to $0.88. For full year 2014, the company’s adjusted EPS grew by 14.1% to $3.65.
The 4Q14 results of rivals Coca-Cola (KO) and PepsiCo (PEP) were impacted by currency headwinds and one-time charges. Leading energy drinks maker Monster Beverage (MNST) reported an impressive 63.6% growth in its 4Q14 adjusted EPS, driven by higher demand for energy drinks. According to the latest data released by Beverage Marketing Corporation in March 2015, energy drinks volumes continued to outperform carbonated soft drinks (or CSDs) in 2014.
What can investors expect this year?
Let’s take into account higher expenses and a 2.0% or $0.08 per share impact of foreign currency headwinds on Dr Pepper Snapple’s bottom line. The company’s February 2015 guidance anticipates full year adjusted EPS in the $3.80 to $3.88 range.
The consensus Wall Street analysts’ estimate for Dr Pepper Snapple’s 1Q15 adjusted EPS is $0.76. The analysts’ estimate for full year 2015 adjusted EPS currently stands at $3.86.
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