Dr Pepper Snapple (DPS 90.38, -1.30) is down 1.4% after lowering its guidance for the fiscal year.
The company revealed that its earnings for fiscal year 2017 will be reduced by $0.03 per share due to a default by a supplier of resin to the company's operations in Mexico.
Dr. Pepper Snapple noted that the default occurred at a resin plant which was not affected by Hurricanes Harvey or Irma. Dr. Pepper Snapple has ordered resin needed for its operations, but the default will require the company to write-off prepaid resin inventory. Operating income is expected to be reduced by $7 to $9 million, which translates to $0.03 per share. The bulk of the impact will be absorbed in the third quarter.
The company now expects 2017 earnings between $4.53 and $4.63 per share, but investors should be aware that the beverage company's other operations were affected by the recent hurricanes and the earthquake that took place on September 19 in Mexico. The company has yet to assess the full impact the events will have on financial results.
Shares of Dr Pepper Snapple have spent the past three months in a narrow range after falling from their 2017 high of $99.47, which was notched in April.
The stock is now down 0.3% for the year, trailing the consumer staples sector, which has climbed 5.7% so far in 2017.