Will Dr Pepper Snapple Continue to Impress Investors in 3Q15?
Dr Pepper Snapple (DPS) delivered growth in its adjusted earnings in the first and second quarters of fiscal 2015. Adjusted EPS (earnings per share) increased by 9.5% and 6.6% in 1Q15 and 2Q15, respectively, on a year-over-year basis.
2Q15 earnings growth shadows peers
Dr Pepper Snapple beat analyst expectations in both the first and second quarters of fiscal 2015. The company reported adjusted EPS of $1.13 in 2Q15, ahead of consensus Wall Street analyst earnings estimate of $1.10. The 6.6% growth in Dr Pepper Snapple’s 2Q15 adjusted EPS was better than its peer group.
The growth in Dr Pepper Snapple’s earnings in 2Q15 was driven by a 1.5% growth in net sales and a 1% decline in selling, general, and administrative expenses. Dr Pepper Snapple constitutes 0.3% of the portfolio holdings of the iShares Russell Mid-Cap ETF (IWR) and 0.9% of the Vanguard Consumer Staples ETF (VDC).
Coca-Cola (KO) and Monster Beverage (MNST) reported a 1.6% and 3.7% decline, respectively, in their 2Q15 adjusted EPS. PepsiCo’s (PEP) 2Q15 adjusted EPS was unchanged from 2Q14. PepsiCo reported its 3Q15 results on October 6. Its adjusted EPS fell by 0.7%.
Expectations from 3Q15 and fiscal 2015
The consensus Wall Street analyst earnings expectation for Dr Pepper Snapple’s 3Q15 adjusted EPS is $1.03. This estimate reflects a 5% growth in 3Q15 adjusted EPS on a year-over-year basis.
In July 2015, Dr Pepper Snapple increased its full-year fiscal 2015 core EPS guidance by $0.05 to a range of $3.85–$3.93. This increase was a result of the company’s strong performance in the first half of fiscal 2015. Dr Pepper Snapple expects foreign currency fluctuations to be a 4% headwind on operating income and EPS. The consensus analyst earnings estimate for fiscal 2015 is $3.96.
Browse this series on Market Realist: