Dr Pepper gave us the news, and its stock got a bad case of earnings blues. Too bad ... the results shouldn't have caused more than perhaps a little investor indigestion.
Compared to expectations of $0.51 per share, Dr Pepper Snapple Group's
Don't get me wrong: The company's first full fiscal quarter since being spun off from British sweets maker Cadbury
Shares fell a nasty 13% on the news, and have continued to slide since then. However, I don't think last week's punishment of the stock quite fits the crime.
Where the pop is
Looking deeper into the numbers, there's actually quite a bit of encouraging news. Taking Glaceau out of the equation, volume was actually up a tad for almost all of the company's product lines -- up enough to help the company generate more than $100 million in earnings. While the number may come up short of a dubious estimate, that still translates into a net margin of about 7%
Now, I'm not naive enough to think that 7% is going to hold a candle to Hansen Natural's
The point is, after the recent drubbing based on what may well end up being an overly pessimistic earnings response, I think Dr Pepper could end up being a cool drink for parched portfolios.
More drinkable Foolishness:
Though Fool contributor James Brumley will drink Dr Pepper on occasion, he's not so enamored that he owns any shares in the company. In fact, he doesn't own any of the stocks mentioned above. Coca-Cola is a Motley Fool Inside Value pick. Try any of our Foolish newsletters today, free for 30 days. You can read about the Fool's disclosure policy here.