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Dr Pepper Snapple Group reports earnings in Q4

BY Allison Cerra

PLANO, Texas It’s sweet to be Dr Pepper Snapple Group, Inc.

The company’s adjusted quarterly profit topped analysts’ estimates on Thursday, helped by higher-than-expected concentrate sales, which sent shares up 9%.

The soft drink maker also forecast a full-year profit that could top analysts’ estimates as its brands, which include 7UP, Dr Pepper and A&W, outperform the overall industry as cash-strapped consumers seek out value-priced drinks. Fourth quarter net sales rose 3%, as sales volume rose 1%.

Segment operating profit increased 4%, reflecting continuing strength in the company’s carbonated soft drinks business.

“Our (carbonated soft drink) case volume contracted only slightly at a time when liquid refreshment beverages declined low single-digits,” CEO Larry Young said.

The company also reported that it generated $709 million of cash from operating activities. Since its separation from Cadbury in May 2008, the company has repaid $395 million of principal of its floating rate term loan, covering both its 2008 and 2009 obligations.

DPS’s forecasts full-year earnings of $1.59 to $1.67 per share, excluding a one-time gain of 12 cents per share related to the termination of a contract with Hansen Natural Corp, owner of Monster Energy Drinks.

Meanwhile, DPS reported a fourth quarter 2008 loss of $2.44 per share, compared with earnings of $0.54 per share in the year-ago period, which Larry Young noted was caused by the current economic climate and the “weak demand for [our] premium products.”

“In our first year as a public company, and in what is arguably one of the toughest economic environments on record, we are proud of what we have accomplished so far,” Young said. “With the U.S. economy facing its worst recession in postwar times and rising unemployment rates, consumers have dramatically changed the way they shop. Value, quality, product satisfaction and increased at-home usage are key factors in purchasing decisions.”

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Dr Pepper Cherry gets a KISS of flavor

BY Allison Cerra

PLANO, Texas Dr Pepper just got a whole lot smoother with the introduction of the new flavor Dr Pepper Cherry.

“We’re excited to offer consumers a smooth new way to enjoy Dr Pepper with the availability of Dr. Pepper Cherry,” said Allison Methvin, director of marketing for Dr Pepper. “It’s a whole new reason to try Dr Pepper.”

To promote the new flavor, Dr Pepper has reached out KISS front man Gene Simmons, to introduce new Dr Pepper Cherry. Simmons, who founded the legendary rock band KISS more than 35 years ago, will star in a new commercial, letting fans know that Dr Pepper Cherry has just a KISS of cherry flavor, making it amazingly smooth.

Simmons’ “Dr Love” will be the third doctor in the “Trust Me, I’m a Dr.” advertising campaign, joining the ranks of basketball legend Dr. J (Julius Erving) and Dr. Frasier Crane (award-winning actor Kelsey Grammer). The TV spot will feature Simmons in full KISS “Demon” regalia. Nick Simmons, Gene’s son, will also star in the commercial.

The new commercial featuring “Dr. Love” launches on March 30, on network and cable television. Dr Pepper Cherry will also hit the streets this summer, sampling more than one million cans. Dr Pepper Cherry is now available nationwide in both regular and diet.

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PepsiCo’s Aquafina unveils Eco-Fina bottle

BY Allison Cerra

PURCHASE, N.Y. PepsiCo’s Aquafina is launching the Eco-Fina Bottle, the lightest half-liter bottle of any nationally distributed bottled water brand in the market.

At a weight of 10.9 g, the Eco-Fina Bottle is made with 50% less plastic, eliminating an estimated 75 million lbs. of plastic annually. Aquafina is also driving additional environmental benefits by producing the bottle at purification centers where filling occurs and by eliminating cardboard base pads from 24-packs, which will contribute to saving 20 million lbs. of corrugate by 2010.

The Eco-Fina Bottle will be available in 24-packs and begins shipping to retail outlets nationwide this April.

This isn’t the first time PepsiCo has developed and produced a new approach to distribution and packaging. In 2007, the company conserved nearly five billion liters of water across its global operations. Last year, PepsiCo took nearly six million kg of packaging per year out of its system globally and reduced greenhouse emissions by 18,000 metric tons annually, made possible by the introduction of a new half-liter bottle for Aquafina flavored waters.

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