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What's in Store for Dr Pepper Snapple (DPS) in Q2 Earnings?
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Dr Pepper Snapple Group, Inc. is set to report second-quarter 2016 results on Jul 27, before the market opens.
Last quarter, this Texas-based beverage company posted a positive surprise of 9.30%. It also has an impressive earnings history. The company has surpassed estimates in the trailing four quarters, resulting in an average positive surprise of 4.48%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Dr Pepper has performed impressively over the last few quarters driven by pricing gains, innovations, strong performance by non-carbonated beverages, powerful marketing programs and productivity improvements. The strong performance continued in the first quarter of 2016 with both the top and bottom line beating estimates. Favorable product/package mix, price hikes and improved volumes, which drove the upside in the first quarter, are expected to drive second quarter 2016 results as well.
Improving U.S. consumer sentiments, rational pricing environment, increased marketing support and cost savings from its Rapid Continuous Improvement (RCI) program should also boost results in the second quarter.
Possible softer fountain foodservice volumes, higher health and welfare and other insurance costs, an arbitration charge related to its Mexican JV and increased marketing expenses are expected to hurt profits in the second quarter. However, lower commodity costs will provide some bottom-line support.
Earnings Whispers
Our proven model does not conclusively show that Dr Pepper Snapple is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.
Zacks ESP: Dr Pepper Snapple’s Earnings ESP is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.19.
Zacks Rank: Though the company’s Zacks Rank #3 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise.
Note that we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are some companies in the food/beverage sector that can be considered as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Post Holdings, Inc. (POST - Free Report) , with an Earnings ESP of +12.77% and a Zacks Rank #1
Campbell Soup Company (CPB - Free Report) with an Earnings ESP of +6.0% and a Zacks Rank #3
The Kraft Heinz Company (KHC - Free Report) with an Earnings ESP of +4.23% and a Zacks Rank #3
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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What's in Store for Dr Pepper Snapple (DPS) in Q2 Earnings?
Dr Pepper Snapple Group, Inc. is set to report second-quarter 2016 results on Jul 27, before the market opens.
Last quarter, this Texas-based beverage company posted a positive surprise of 9.30%. It also has an impressive earnings history. The company has surpassed estimates in the trailing four quarters, resulting in an average positive surprise of 4.48%.
DR PEPPER SNAPL Price and EPS Surprise
DR PEPPER SNAPL Price and EPS Surprise | DR PEPPER SNAPL Quote
Let’s see how things are shaping up for this announcement.
Factors to Consider
Dr Pepper has performed impressively over the last few quarters driven by pricing gains, innovations, strong performance by non-carbonated beverages, powerful marketing programs and productivity improvements. The strong performance continued in the first quarter of 2016 with both the top and bottom line beating estimates. Favorable product/package mix, price hikes and improved volumes, which drove the upside in the first quarter, are expected to drive second quarter 2016 results as well.
Improving U.S. consumer sentiments, rational pricing environment, increased marketing support and cost savings from its Rapid Continuous Improvement (RCI) program should also boost results in the second quarter.
Possible softer fountain foodservice volumes, higher health and welfare and other insurance costs, an arbitration charge related to its Mexican JV and increased marketing expenses are expected to hurt profits in the second quarter. However, lower commodity costs will provide some bottom-line support.
Earnings Whispers
Our proven model does not conclusively show that Dr Pepper Snapple is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.
Zacks ESP: Dr Pepper Snapple’s Earnings ESP is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.19.
Zacks Rank: Though the company’s Zacks Rank #3 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise.
Note that we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are some companies in the food/beverage sector that can be considered as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Post Holdings, Inc. (POST - Free Report) , with an Earnings ESP of +12.77% and a Zacks Rank #1
Campbell Soup Company (CPB - Free Report) with an Earnings ESP of +6.0% and a Zacks Rank #3
The Kraft Heinz Company (KHC - Free Report) with an Earnings ESP of +4.23% and a Zacks Rank #3
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>