Dr. Pepper Snapple Group Inc.

Dr. Pepper Snapple Group Inc. (DPS - Analyst Report) is seeing growth in its value juice drinks and its flagship Dr. Pepper brand. The company has surprised on estimates 3 out of the last 4 quarters by an average of 4.91%.

Company Description

Dr. Pepper Snapple Group manufactures 50 beverage brands for the North America and the Caribbean markets. Its brands include iconic names such as Dr. Pepper, Snapple, Sunkist soda, 7UP, A&W, Crush, Canada Dry, Mott's, Squirt and Hawaiian Punch.

Net Sales Rose 4% in the First Quarter

On May 12, Dr. Pepper Snapple Group reported first-quarter results that surprised on estimates by 23.33%, or 7 cents a share.

Adjusted earnings per share were 37 cents, which excluded net gains associated with the Hansen contract termination settlement and the sale of distribution rights. Analysts expected just 30 cents per share.

Excluding the loss of Hansen product distribution, sales climbed 4% as volume growth rose 6%. Lower commodity and fuel costs helped during the quarter.

Carbonated soft drinks and value juices performed well in the quarter, fueled by gains in Crush and Hawaiian Punch. Dr. Pepper continued to be solid. The premium priced drinks, such as Snapple, were still pressured due to the economic conditions.

2009 Outlook

Given the economic conditions, Dr. Pepper Snapple still expects 2009 sales to be down 2% to 4%. Excluding the loss of Hansen product distribution, it expects sales to grow 2% to 4%.

The company raised its 2009 forecast. Excluding adjustments, EPS should be in the range of $1.70 to $1.78 compared to the previous guidance of $1.59 to $1.67.

2009 Consensus Estimates Rise

Given the surprise on estimates in the first quarter and the revision to 2009 guidance, it's not surprising that 7 out of 7 covering analysts have raised estimates for the full-year to a consensus of $1.77 per share from $1.67 just 30 days ago.

Value Fundamentals

Dr. Pepper Snapple Group (DPS) is a Zacks #1 Rank (strong buy) stock.

It is trading with P/E ratio of just 12.7x forward earnings. The company has a price-to-book of 2.10. DPS has a solid 1-year return on equity (ROE) of 15.51%.