Green Mountain's 4Q far exceeds expectations

Green Mountain beats in 4Q, issues strong guidance; shares soar after hours

Associated Press

WATERBURY, Vt. (AP) -- Green Mountain Coffee Roasters Inc.'s shares soared 22 percent in after-hours trading Tuesday after the beleaguered coffee company reported fiscal fourth-quarter results and guidance that far exceeded market expectations.

The Waterbury, Vt., maker of Keurig single-serve coffee makers said that it earned $91.9 million, or 58 cents per share, for the quarter that ended Sept. 29. That's up from $75.4 million, or 47 cents per share, earned in its first quarter last year.

Green Mountain benefited from an extra week in the most recent quarter.

The company earned 64 cents per share in the most recent quarter after adjusting for costs tied to a regulatory inquiry and other special items. That handily beat the 48 cents per share that analysts polled by FactSet had forecast.

Green Mountain's total revenue increased 33 percent to $946.7 million from $711.9 million on stronger sales and price increases for its single-serve coffee packs. Analysts were expecting revenue of $902.7 million.

The company was the pioneer in single-serve coffee makers in the U.S. with its Keurig system. It grew quickly on the popularity of the product, but it began to struggle as competitors came out with their own versions and its key patents expired. It also has faced a multi-year U.S. Securities and Exchange Commission inquiry into its accounting practices

However, Green Mountain has hired a new CEO, added new brewer models and extended the array of single-serve beverage packets that it sells.

The company managed to improve its sales for the quarter, reporting that revenue from sales of its brewers and accessories increased 45 percent year-over-year and single-serve pack revenue increased 59 percent. Its royalty revenue fell for the quarter.

President and CEO Lawrence Blanford said that the strong quarter speaks to the company's "continued strategic progress." He said the company's management team also believes it points to the significant opportunity still ahead for the company.

Green Mountain said it expects to earn 62 to 67 cents per share for its first quarter on an adjusted basis. It said its sales would increase 14 to 18 percent over the same period in its prior fiscal year. That calculates to a revenue forecast of $1.32 billion to $1.37 billion.

Analysts had forecast earnings of 57 cents per share on revenue of $1.28 billion.

The company reiterated its full-year forecast of earning $2.64 to $2.74 per share on an adjusted basis with revenue gains of 15 to 20 percent. That calculates to a revenue forecast of roughly $4.44 billion to $4.63 billion.

Analysts had forecast earnings of $2.49 per share for the year on revenue of $4.39 billion.

Green Mountain earned $362.6 million, or $2.28 per share, for its full fiscal year. That's up from $199.5 million, or $1.31 per share, in the prior year. It earned $2.40 per share versus $1.64 per share last year on an adjusted basis. Its annual revenue jumped to $3.86 billion from $2.65 billion.

Shares soared $6.45 to $35.40 in after-hours trading on the news. Green Mountain's stock price had fallen nearly 60 percent over the past nine months.

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