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LONDON (AP) -- Chocolate company Cadbury Schweppes PLC raised its full-year guidance for its confectionary business on Tuesday, saying it will beat its growth goal of 4 percent to 6 percent. The maker of Dairy Milk chocolate and Trident gum said in a trading update that sales rose 10 percent in the third quarter, boosting sales growth for the first nine months of the year to 7 percent. Analysts noted, however, that the gains came against a weak performance a year earlier, and that foreign exchange rates were putting a brake on earnings this year. Cadbury's Americas Beverages unit, which is being spun off, was forecast to achieve revenue growth of 4 percent to 5 percent, while making "make modest year-on-year progress in underlying operating profit." Cadbury announced that the beverages unit was being renamed Dr Pepper Snapple Group Inc. The company had announced in October that it would spin off the maker of Snapple and Dr Pepper faltering credit markets made a sale more difficult. The future of the U.S. drinks business has been up in the air since earlier this year, when Cadbury came under pressure from investors led by U.S. billionaire Nelson Peltz to separate its beverage and candy arms. Cadbury said Monday that Peltz's Trian Group had raised its stake in the business to 4.5 percent from 3.47 percent. Shares in Cadbury fell 1.7 percent to close at 629 pence ($12.82). "Whilst accepting that Cadbury has made progress over the second half of 2007, we suspect that the share price already reflects best investor expectations," said Jeremy Batstone-Carr, an analyst at Charles Stanley in London. Simon Marshall-Lockyer at Bear Stearns noted that the strong gains in confectionary came after depressed sales in 2006, when salmonella contamination of chocolate products in the United Kingdom led to a recall which cost the company and estimated 30 million pounds ($61 million) in revenue. Batstone-Carr said earnings from the beverage unit will be hit by $30 million in losses from the disappointing launch of a sports drink, Accelerade. He also noted that currency changes are expected to reduce overall earnings but about 6 percent for the full year. Todd Stitzer, Cadbury Schweppes CEO, expressed confidence about the coming year. "While the economic outlook for 2008 is uncertain, we are confident that our trading momentum will carry on into the New Year, supported by our confectionery growth and efficiency initiatives," Stitzer said. http://www.cadburyschweppes.com
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