* Fourth-quarter earnings $0.89/share vs est. $0.75
* Forecasts first-qtr adj earnings $0.85-$0.90/share vs est.
* Announces new $1 bln share buyback program
* Shares rise 4 pct after market
By Maria Ajit Thomas
Nov 20 K-cup coffee pods maker Green Mountain
Coffee Roasters Inc said it expected stronger revenue
in the second half of its fiscal 2014 as it converts unlicensed
coffee pod makers to licensed partners.
The company, however, gave a cautious current-quarter
forecast, citing a transition to a new brewing system and
weakness in U.S. consumer spending.
Shares of Green Mountain, which also approved a share
repurchase program of up to $1 billion, were up 4 percent in
Sales of the company's K-cups have risen steadily even
though the expiry of some patents on its single-serve coffee
pods last year allowed rivals TreeHouse Foods Inc and
Caribou Coffee Co Inc and private-label firms to
launch their own products.
Green Mountain has licensed K-cups to companies such as J.M.
Smucker Co, Starbucks Corp, Tetley USA Inc and
Associated British Foods Plc, which sell their coffee and tea in
Green Mountain also sells its coffee and the beverages of
other brands in K-cups.
The company said on a post-earnings conference call that it
would launch a new Keurig brewing system that would not brew
unlicensed K-cups. This new system will replace the older ones
over 2014 and early 2015.
K-cups from new licensed partners will hit the shelves
during the second half of fiscal 2014 ending September, Chief
Executive Brian Kelley said on the call.
Green Mountain sells its brewers virtually at cost to fuel
adoption of its system. A majority of the company's profits
comes from K-cups.
Green Mountain said it expected net sales growth of
low-to-mid single digits in the first quarter due to competition
from unlicensed coffee pods and the impact of a weaker Canadian
The company forecast adjusted earnings of 85-90 cents per
share. Analysts on average were expecting 96 cents per share,
according to Thomson Reuters I/B/E/S.
Strong sales of K-cups and lower green coffee costs helped
the company report better-than-expected results for the fourth
Net income rose to $127 million, or 83 cents per share, in
the quarter ended Sept. 28 from $91.9 million, or 58 cents per
share, a year earlier.
On an adjusted basis, Green Mountain earned 89 cents per
share, beating the average analyst estimate of 75 cents.
Revenue rose 11 percent to $1.05 billion, above analysts'
estimates of $964.6 million. Sales of K-cups rose 11 percent.
The company's shares were up at $64.30 in trading after the
bell. The stock has risen 53 percent to Wednesday's close of
$61.43 on the Nasdaq.
Green Mountain shares are heavily shorted, with nearly 27
percent of its outstanding shares held in short positions.