* 4th-qtr EPS of $0.64/shr top Wall St view of $0.48/shr
* Sales of $946.7 mln top Street estimates as well
* Expectations for holiday quarter, new year top Street's
By Martinne Geller
Nov 27 Green Mountain Coffee Roasters Inc
on Tuesday forecast earnings for the current quarter
and full year that were much stronger than analysts expected,
helped by an expanded lineup of single-serve coffee makers and
drinks, sending its shares up 24 percent in after-hours trade.
Green Mountain, which makes the Keurig brewing system and
the K-Cups that go with them, is the leader in the
small-but-growing U.S. market for single-serve coffee.
The September expiration of certain of its K-Cup patents
opened the door for lower-cost rivals that stand to pressure
prices overall and margins for Green Mountain, which makes most
of its profit from the cups rather than the brewers.
But Chief Executive Lawrence Blanford said on a conference
call with analysts that he had not seen any "marketplace
dynamics that have caused us to think differently about our
outlook for single-serve packs."
Green Mountain, which started as a small Vermont coffee
company, is also expanding beyond coffee, introducing fruity
"wellness" drinks with nutrients. It is also working to move
consumers to its new higher-end Vue system, whose patents are
still in effect, and unveiled a single-cup espresso machine with
Italy's Luigi Lavazza.
"As we look to the future, we remain committed to bringing
fresh ideas to light; pushing forward disruptive technologies;
and capturing true innovation," said Blanford, who will soon be
succeeded by Brian Kelley from Coca-Cola Co.
Investors have been largely bearish on the stock since last
year when influential short-seller David Einhorn cast doubts on
Green Mountain's sales figures, growth projects and accounting
It has also had difficulty forecasting demand for its
coffee, a U.S. securities probe into its accounting, and the
demotion of company founder Robert Stiller after ill-timed stock
sales due to margin calls.
With an additional selling week in the quarter to boost
results, Green Mountain said net income was $91.9 million, or 58
cents per share, in its fiscal fourth quarter ended on Sept. 29,
up from $75.4 million, or 47 cents per share, a year earlier.
Excluding items, earnings were 64 cents per share. On that
basis, analysts on average were expecting 48 cents, according to
Thomson Reuters I/B/E/S.
Net sales jumped 33 percent to $946.7 million, topping
analysts' average estimate of $902.7 million.
Green Mountain raised its forecast for the new fiscal year
to a range of $2.64 to $2.74 per share, from a prior view of
$2.55 to $2.65 per share. It expects net sales to grow 15
percent to 20 percent for the year.
For the current first quarter Green Mountain forecast
earnings of 62 cents to 67 cents per share and net sales growth
of 14 percent to 18 percent. The slightly lower sales growth
forecast was due to an unusually strong quarter last year.
The first quarter includes the key holiday shopping period,
when gifts of coffee makers can turn many people into ongoing
Analysts on average were expecting earnings of 59 cents for
the quarter and $2.51 for the year, according to estimates.
Green Mountain shares jumped 24 percent to $35.81 after
hours, from their Nasdaq close on Tuesday at $28.95.