Dr Pepper Snapple Group, Inc. reported fourth quarter 2011 diluted earnings of $0.77 per share compared to $0.49 per share in the prior year period. Excluding the previously disclosed legal provision relating to the California litigation in the current year and the early retirement of a portion of the 6.82 percent 2018 notes and certain tax-related items in the prior year, diluted earnings per share were $0.82 compared to $0.67 in the prior year.
For the quarter, reported net sales increased 3 percent reflecting 4 percentage points of pricing, favorable mix and the impact of repatriated brands, partially offset by lower sales volume. Reported segment operating profit (SOP) increased 2 percent reflecting net sales growth, partially offset by higher packaging and ingredient costs and the previously disclosed legal provision. Reported income from operations for the quarter was $271 million including $7 million of unrealized mark-to-market losses on commodity hedging. Reported income from operations was $268 million in the prior year period, including an $8 million gain on the termination of coverage in certain U.S. post-retirement medical plans, a $3 million gain on unrealized commodity-related mark-to-market partially offset by $3 million of fees related to the licensing agreements with The Coca-Cola Co. (Coca-Cola).
For the year, reported net sales increased 5 percent. On a reported basis, diluted earnings per share were $2.74 in the current year compared to $2.17 in the prior year, an increase of 26 percent. Excluding the previously disclosed legal provision in the current year and the loss on the early retirement of a portion of the 6.82 percent 2018 notes and certain tax-related items in the prior year, the company earned $2.79 per diluted share, an increase of 16 percent, compared to $2.40 in the prior year.
DPS President and CEO Larry Young said in a prepared statement, “As I look back on a year of unprecedented commodity and retail price increases, I am pleased with the performance of our brands. Our national rollout of Dr Pepper TEN has been well received by our bottling partners, retailers and consumers and I am excited about the marketing plans we have in place in 2012 for this breakthrough product. Sun Drop is now the No. 2 brand in the citrus category, driving 43 percent of the growth in that category. Our tea and juice portfolios continued to outperform industry trends.”
“I’m extremely proud of the efforts of our great employees to get our well-loved brands into the hands of more consumers, all while embracing a rapid continuous improvement mindset that will make us better and faster in everything we do,” Young added. “Looking forward we are cautiously optimistic about the economic recovery. With plans that are stronger than ever in 2012, I am confident that we will continue to execute our focused strategy and deliver strong shareholder returns.”
