Keurig Dr Pepper Inc. (NYSE: KDP) reported Q4 EPS of $0.30, in-line with the analyst estimate of $0.30. Revenue for the quarter came in at $2.81 billion versus the consensus estimate of $2.84 billion.

• Successfully completed the merger, with integration efforts and synergies continuing on track.
• Delivered 2018 financial performance in line with the long-term targets communicated at the time of the merger, positioning KDP for another year of growth in 2019 in line with its merger targets.
• Drove strong in-market performance and market share growth for the year for carbonated soft drinks (CSDs), single serve coffee and other key categories.
• Repaid approximately $940 million of bank debt since merger close, due to strong operating profit results and ongoing effective working capital management.
• Acquired Core, a rapidly-growing premium enhanced water brand, and Big Red, a strong regional CSD brand.
• Entered into a long-term partnership with Danone Waters of America to sell, distribute and merchandise evian, the leading global brand of premium natural spring water, across the U.S., and expanded KDP\'s relationship with both Peet\'s, a premium specialty coffee company, for ready to drink coffee, and Forto, a rapidly-growing brand of coffee energy shots.

Commenting on the announcement, Keurig Dr Pepper Chairman and CEO Bob Gamgort stated, "We finished 2018 on a strong note, successfully managing through the merger integration and achieving full year results in line with our 2018 targets. We also delivered strong in-market performance, growing market share in carbonated soft drinks, single-serve coffee and other key categories. Looking ahead, we are confident in our outlook for 2019 Adjusted diluted EPS growth of 15% to 17%, which is in line with our long-term merger target, despite the operating environment becoming more challenging."

GUIDANCE:

Keurig Dr Pepper Inc. sees FY2019 EPS of $1.20-$1.22, versus the consensus of $1.23.

The Company expects Adjusted diluted EPS growth in 2019 in the range of 15% to 17%, or $1.20 to $1.22 per diluted share, in line with its long-term merger target. Supporting this guidance are the following expectations:

• Net sales growth of approximately 2%, consistent with the Company\'s long-term merger target of 2-3%, despite the impact of the changes in the Allied Brands portfolio in the Packaged Beverages segment.
• Merger synergies of $200 million in 2019, consistent with the Company\'s long-term merger target for $200 million per year over the 2019-2021 period.
• Other non-operating income/expense is expected to approximate $30 million of expense in 2019 and assumes no gains related to changes in the Allied Brands portfolio, such as the impacts in 2018 from BODYARMOR and Core, which recorded income of $24 million and $12 million, respectively.
• Adjusted interest expense is expected to be in the range of $570 million to $590 million, reflecting ongoing deleveraging and the continued benefit of unwinding interest rate swap contracts.
• The Adjusted effective tax rate is expected to be in the range of 25.0% to 25.5%.
• Diluted weighted average shares outstanding are estimated to be approximately 1,420 million.
• The Company continues to expect significant cash flow generation and rapid deleveraging, with a targeted leverage ratio below 3.0x in two to three years from the July 2018 closing of the merger.

For earnings history and earnings-related data on Keurig Dr Pepper Inc. (KDP) click here.