• '10 Profits hit by early debt payment
  • Net sales up by 2%
  • Expects stronger growth in 2011
Dr Pepper Snapple expects strong sales growth in 2011

Dr Pepper Snapple expects strong sales growth in 2011

Dr Pepper Snapple has said that momentum is building in its soft drinks business, despite seeing profits in 2010 curtailed by a one-off debt payment.

Dr Pepper Snapple's net profits for the 12 months to the end of December slipped by nearly 5% to US$528m, the group said today (17 February).

The soft drinks producer attributed the fall to a $100m charge incurred in the fourth quarter following its decision to pay off a portion of its debt early. However, operating profits also fell by 5.5% the year, reflecting higher costs.

Despite the pressure on earnings in 2010, Dr Pepper Snapple's president and CEO, Larry Young, was upbeat. "As we look ahead, I'm encouraged by some of the improving trends we're seeing in consumer spending and in the economy generally and by the momentum of our brands and business."

The 7Up and Dr Pepper producer's net sales increased by 2% versus 2009, to $5.63bn, although volume sales were flat for the year due to tough conditions in Mexico and the Carribean.

But, net sales rose by 4% in the fourth quarter and the company expects sales and profits momentum to continue to improve in 2011. It forecast that net sales will rise by between 3% and 5% in 2011, while diluted earnings per share are expected to hit a range of between $2.7 and $2.78. On an underlying basis, diluted earnings per share hit $2.4 in 2010.