Dr Pepper Snapple Group (NYSE: DPS) is having one refreshing day so far. At the time of this writing, shares of the beverage entity were up over 5%, with volume being quite strong. Dr Pepper delivered a decent Q2 report that surprised the experts on Wall Street, so the market was happy to extend a little buying interest.
According to the preview, Dr Pepper was supposed to do $1.5 billion on the top line and 49 cents on the bottom line. Net sales roughly matched the estimate, but net income went way beyond the call. Dr Pepper made 62 cents per share on an adjusted basis.
The growth rates weren't impressive, I'll say that. Per-share profit only increased by a slight 3%, and sales definitely lost some value. However, the beat on the bottom line is very significant, so that's where investors are most likely focusing their analysis. Also, for fans of cash-flow statements, please note that net cash from operating activities jumped over 30% for the six-month period. You won't see jumps like that all the time, probably, but still, you've got to like it.
Overall volume growth was acceptable, but not all brands scored. Hawaiian Punch volume soared 18%, and the Mott's trademark increased 8%. Unfortunately, the core brands were weak. And Snapple was particularly challenged in Q2.
As can be seen, then, the Dr Pepper story is not without its bad plot points. The company has to get its flagship products moving again. Competitors Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP) have the same problem, so Dr Pepper isn't alone on this.
Dr Pepper the stock looks strong, and fundamentals for the most part seem okay on a long-term basis, if not wholly exciting. If the stock drops, it's certainly worth a session of due diligence.
Disclosure: I own Coke; positions can change without notice.
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