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DPS president and CEO Larry Young said: "It's no secret that the beverage industry continues to face significant headwinds. Higher prices at the gas pump and at retailers across the country have impacted our consumers and their shopping habits. At DPS, we will continue to look for ways to leverage our strong flavor portfolio, customer partnerships and vertically integrated business model to expand our distribution footprint and provide preferred and affordable brands to more consumers in more outlets.

"During the quarter, we marked the official separation of our business from Cadbury on 7 May, 2008. So in addition to winning on the streets, our corporate teams worked tirelessly to separate the business and establish our stand-alone financial statements. There's still a lot left to do, but I am immensely proud of the progress we have made."

The company's results reflect the impact of certain related party transactions with Cadbury that continued until separation on 7 May 2008.

CSD and NCB

In CSDs, Dr Pepper volume declined 1%, however the company's four core brands (7UP, Sunkist, A&W and Canada Dry) declined 5%

In NCBs, Hawaiian Punch volume increased low double-digits and Mott's was up 4%. Snapple declined mid single-digits as it cycled significant promotional activity in the prior year period, which for profitability reasons, was not repeated in 2008. In Mexico, Aguafiel declined 21% reflecting high single-digit price increases and a more competitive environment. The loss of the distribution agreement for glaceau products (November 2007) reduced NCB growth by 8% in the quarter and impacted sales net sales growth negatively by 4%.

In North America, volume declined 3% and in Mexico and the Caribbean, volume declined 9%. Sales volume was also down 3%, but net sales increased 1%.

Income from operations decreased 4% reflecting segment operating profit declines, separation costs totaling $20m and restructuring costs amounted to $14m for the quarter.

The DPS continues to expect 3% to 5% net sales growth throughout 2008. While the company said it is realising benefits from its 2007 restructuring actions, it claims these are being offset by higher fuel costs, the consolidation impact of the SeaBev acquisition and new stand-alone costs arising from the spin-off.