Keurig Dr Pepper Inc. shares rose after revenue and earnings beat expectations as strong sales of cold beverages and in international markets offset a decline in coffee.
The beverage company, which makes Dr Pepper soda and Keurig coffee, reported first-quarter revenue of $3.98 billion, topping the average of analyst estimates. Earnings per share, excluding some items, also exceeded projections.
Barclays analyst Lauren Lieberman said that the company’s cold drink sales were “in particular standing out” in a note Thursday morning. Their revenue growth was high enough to suggest strong sales from both the company’s legacy beverages, as well as Ghost energy drinks.
In the first quarter, the company’s cold beverages revenue grew by 12%, driven by higher volumes and price, and international revenue was up 20%. Those gains offset a 2.3% drop in US coffee revenue, where rising coffee prices weighed down sales volumes.
Shares rose as much as 5.5% before the bell.
Keurig Dr Pepper earlier this month completed its acquisition of JDE Peet’s NV — the first step in a strategic overhaul — and expects to be ready later this year to split the combined entity into two: a beverage company led by current Keurig CEO Tim Cofer, among others, and a coffee company led by JDE Peet’s chief executive Rafael Oliveira.
The company has faced market skepticism over the amount of debt involved and has twice raised additional capital to win over investors.
“With well-constructed plans in place, high-quality execution, and improving cost visibility as the year unfolds, we remain confident in our ability to deliver on our commitments while standing up two pure-play companies positioned for success,” Cofer said in a statement Thursday.
The company reaffirmed its outlook for the full year of net sales between $25.9 billion and $26.4 billion and adjusted earnings per share growth in the low double digit range.
Shares had fallen 5.3% this year through Wednesday’s close, compared to a 4.3% increase in the S&P 500 Index.