Dr Pepper Snapple Group Inc. (NYSE: DPS) reported first quarter 2015 EPS of $0.81 compared to $0.78 in the prior year period, an increase of 4 percent. Core EPS were also $0.81, compared to $0.74 in the prior year, an increase of 9 percent.

For the quarter, reported net sales increased 4 percent, as a sales volume increase of 2 percent and favorable segment and product mix were partially offset by 1 percentage point of unfavorable foreign currency translation. Reported segment operating profit (SOP) increased 7 percent, or $23 million, on net sales growth, ongoing productivity improvements and a planned reduction in marketing investments. On a currency neutral basis, SOP increased 10 percent.

Reported income from operations for the quarter was $270 million, up 4 percent compared to the prior year period, including a $1 million unrealized commodity mark-to-market loss. Reported income from operations was $260 million in the prior year period, including $12 million of unrealized commodity mark-to-market gains. Core income from operations was $271 million, up 9 percent compared to the prior year period.

DPS President and CEO Larry Young said, “We had a strong start to 2015. Our teams continued to persevere though a challenging environment by executing against our key priorities of building our brands with consumers and executing with excellence in the marketplace. We grew both dollar and volume share in CSDs in Nielsen-measured markets, outperforming the category. We expanded distribution and availability across our tea and juice portfolios and launched relevant innovation to address consumers’ changing needs. Our Rapid Continuous Improvement (RCI) capabilities continue to develop across the organization and are helping to drive top-line growth, and we still have a tremendous amount of runway ahead of us.”

BCS volume
For the quarter, BCS volume increased 3 percent with carbonated soft drinks (CSDs) increasing 3 percent and non-carbonated beverages (NCBs) increasing 5 percent.

By geography, U.S. and Canada volume increased 2 percent, and Mexico and the Caribbean volume increased 13 percent.

In CSDs, Peñafiel increased 20 percent on distribution gains. Our Core 4 brands increased 4 percent, as a double-digit increase in Canada Dry was partially offset by low-single-digit declines in Sunkist soda and 7UP. A&W was flat in the quarter. Squirt increased 15 percent, and Schweppes increased 8 percent. These increases were partially offset by a 1 percent decline in brand Dr Pepper on continued declines in diet. Fountain foodservice volume increased 1 percent in the quarter.

In NCBs, Hawaiian Punch volume increased 7 percent on increased promotional activity and package innovation. Clamato increased 20 percent, and our water category increased 9 percent. Snapple increased 5 percent, driven primarily by high-single-digit growth in Snapple Premium, which was partially offset by our de-emphasis of our value products.

Sales volume
Sales volumes increased 2 percent for the quarter.

Beverage Concentrates

Net sales for the quarter increased 2 percent, as concentrate price increases taken at the beginning of the year and lower discounts in the quarter were partially offset by a 2 percent decline in concentrate shipments. SOP increased 6 percent on net sales growth, a planned reduction in marketing investments and lower IT costs.

Packaged Beverages
Net sales for the quarter increased 5 percent, as a sales volume increase of 4 percent and favorable product mix were partially offset by increased promotional activity in the quarter. SOP increased 10 percent on net sales growth and ongoing productivity improvements.

Latin America Beverages
Net sales for the quarter increased 14 percent, driven primarily by a 13 percent increase in sales volumes. SOP increased 89 percent as net sales growth and ongoing productivity improvements were partially offset by increases in logistics costs and other operating expenses.

Corporate and other items
For the quarter, corporate costs totaled $71 million, including a $1 million unrealized commodity mark-to-market loss. Corporate costs in the prior year period were $57 million, including a $12 million unrealized commodity mark-to-market gain.

Net interest expense increased $2 million for the quarter compared to the prior year.

For the quarter, the reported effective tax rate was 35.7 percent. The prior year effective tax rate was 34.3 percent, as a $2 million deferred tax benefit due to a New York State law change decreased the effective tax rate by 0.9 percent.

Cash flow
For the quarter, the company generated $101 million of cash from operating activities compared to $129 million in the prior year period. Capital spending totaled $20 million compared to $37 million in the prior year period. The company returned $214 million to shareholders in the form of stock repurchases ($135 million) and dividends ($79 million).

2015 full-year guidance
The company continues to expect full-year reported net sales to be up approximately 1 percent and core EPS to be in the $3.80 to $3.88 range after the impact of foreign currency, which is now expected to negatively impact net sales and core EPS growth by approximately 1 percent and 3 percent, respectively.

Packaging and ingredient costs are expected to decrease COGS by about 1 percent on a constant volume/mix basis.

The company expects its core tax rate to be approximately 35.5 percent.

The company continues to expect capital spending to be approximately 3 percent of net sales.

The company expects to repurchase $500 million to $550 million of its common stock.