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Dr Pepper Snapple cuts sales forecast as people sip less soda

Wednesday, 23 Oct 2013 | 9:35 AM ET

* Sees 2013 sales to be flat vs prior view of 2 pct rise

* Third quarter earnings/share $0.88 vs est $0.83

* Revenue rises slightly to $1.54 bln vs est $1.56 bln

* Shares flat

Oct 23 (Reuters) - Dr Pepper Snapple Group Inc reported third-quarter revenue that missed analysts' estimates and cut its full-year revenue outlook for the second time as health-conscious customers shun its sodas such as Dr Pepper and 7UP.

Sales of sodas in the United States have been falling for years due to concerns over their role in encouraging obesity and diabetes.

In response, Dr Pepper Snapple launched low-calorie versions of its sodas, but many customers are also steering clear of such offerings due to worries over the use of artificial sweeteners.

"We continue to operate in an extremely challenging environment, with significant pressures in the carbonated soft drink category now impacting both regular and diet products," Chief Executive Larry Young said in a statement.

The contribution from sodas to PepsiCo Inc's North America drinks business has dropped to 40 percent from more than 50 percent a decade ago.

Coca-Cola-Co sales volume in North America rose in its latest quarter mainly due to its non-soda offerings.

Dr Pepper Snapple now expects sales to be flat for 2013, down from its previous outlook of a 2 percent increase. In February, it had forecast a 3 percent rise in sales.

The company maintained its full-year profit outlook.

Dr Pepper Snapple's net income rose to $207 million, or $1.01 per share, in the third quarter ended Sept. 30, from $179 million, or 84 cents per share, a year earlier.

Excluding items, earnings were 88 cents per share. Analysts on average were expecting profit of 83 cents per share, according to Thomson Reuters I/B/E/S.

Net sales rose 0.7 percent to $1.54 billion, but missed market estimates of $1.56 billion.

Dr Pepper Snapple's shares were marginally up at $45.62 Wednesday on the New York Stock Exchange.

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