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What's in Store for Dr Pepper Snapple (DPS) in Q3 Earnings?
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Dr Pepper Snapple Group, Inc. is set to report third-quarter 2016 results on Oct 27, before the market opens.
Last quarter, this TX-based beverage company posted a positive surprise of 5.04%. It also has an impressive earnings history. The company surpassed estimates in the trailing four quarters, resulting in an average positive surprise of 5.06%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Dr Pepper Snapple has robust long-term fundamentals – strong position in the flavored CSD market, aggressive Rapid Continuous Improvement (RCI) cost savings and regular buybacks. Continuing with its strong performance in 2015, the company recorded solid top- and bottom-line results in the first half of 2016. Solid execution, pricing gains, innovation, strong non-carbonated beverages performance, powerful marketing programs and productivity improvements have been driving sales and earnings growth for Dr Pepper Snapple since 2015 and are expected to boost third-quarter 2016 results as well. Moreover, the company raised its earnings expectations for 2016 twice this year.
Improving U.S. consumer sentiments, rational pricing environment, increased marketing support and cost savings from its RCI program also bode well.
However, a significant rise in marketing expenses and higher health and welfare and other insurance costs are expected to hurt profits in the third quarter.
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 $1.11. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Though the company’s Zacks Rank #2 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.
Here are some companies in the broader consumer staples sector that can be considered as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Avon Products Inc. has an earnings ESP of +33.33% and a Zacks Rank #1. The company is expected to report third-quarter 2016 results on Nov 3.
Coty Inc. (COTY - Free Report) has an earnings ESP of +2.94% and a Zacks Rank #3. The company is scheduled to report its quarterly numbers on Nov 3.
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What's in Store for Dr Pepper Snapple (DPS) in Q3 Earnings?
Dr Pepper Snapple Group, Inc. is set to report third-quarter 2016 results on Oct 27, before the market opens.
Last quarter, this TX-based beverage company posted a positive surprise of 5.04%. It also has an impressive earnings history. The company surpassed estimates in the trailing four quarters, resulting in an average positive surprise of 5.06%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Dr Pepper Snapple has robust long-term fundamentals – strong position in the flavored CSD market, aggressive Rapid Continuous Improvement (RCI) cost savings and regular buybacks. Continuing with its strong performance in 2015, the company recorded solid top- and bottom-line results in the first half of 2016. Solid execution, pricing gains, innovation, strong non-carbonated beverages performance, powerful marketing programs and productivity improvements have been driving sales and earnings growth for Dr Pepper Snapple since 2015 and are expected to boost third-quarter 2016 results as well. Moreover, the company raised its earnings expectations for 2016 twice this year.
Improving U.S. consumer sentiments, rational pricing environment, increased marketing support and cost savings from its RCI program also bode well.
However, a significant rise in marketing expenses and higher health and welfare and other insurance costs are expected to hurt profits in the third quarter.
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 $1.11. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Though the company’s Zacks Rank #2 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.
DR PEPPER SNAPL Price and EPS Surprise
DR PEPPER SNAPL Price and EPS Surprise | DR PEPPER SNAPL Quote
Stocks to Consider
Here are some companies in the broader consumer staples sector that can be considered as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Avon Products Inc. has an earnings ESP of +33.33% and a Zacks Rank #1. The company is expected to report third-quarter 2016 results on Nov 3.
Cott Corporation , slated to report its quarterly numbers on Nov 10, has an earnings ESP of +33.33% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Coty Inc. (COTY - Free Report) has an earnings ESP of +2.94% and a Zacks Rank #3. The company is scheduled to report its quarterly numbers on Nov 3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>