Keurig Green Mountain Profit Rises - Update

(RTTNews) - Keurig Green Mountain Inc. (GMCR) Wednesday reported an increase in profit for the fourth quarter, driven by continued strong demand for its single-cup coffee packs, with both earnings and revenues topping Wall Street estimates.

Keurig Green Mountain, known for its Keurig coffee brewers, said sales from portion packs jumped 22 percent to $948.7 million, while sales for brewers and accessories dropped 5 percent to $181.6 million.

"The fourth quarter was a strong end to the year, with 17% Keurig beverage system revenue growth highlighted by strong portion pack growth across our brand portfolio," said CEO Brian Kelley.

The company sold 2.4 million Keurig system brewers during the quarter. Green Mountain has been the dominant player in the single-serve coffee industry, but the company faces stiff competition from the likes of Starbucks Corp. (SBUX).

Keurig Green Mountain's net sales for the grew 14 percent to $1.20 billion from $1.05 billion a year ago. Analysts polled by Thomson Reuters had a consensus revenue estimate of $1.16 billion for the quarter.

Waterbury, Vermont-based Keurig Green Mountain's fourth-quarter profit rose to $141.1 million or $0.86 per share from $127.0 million or $0.83 per share last year.

Adjusted earnings for the quarter improved to $148.8 million or $0.90 per share from $136.0 million or $0.89 per share last year. Analysts expected earnings of $0.77 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Operating margins expanded 220 basis points in the quarter.

Looking forward to the first quarter, the company expects adjusted earnings of $0.83 to $0.88 per share and net sales growth in the high-single digits. Analysts currently expect earnings of $0.96 per share on revenue growth of 16.70 percent for the quarter.

For the fiscal year 2015, the company projects adjusted earnings growth of mid-single digits to high-single digits and sales growth in the high-single to low-double digits.

The company also raised its annualized dividend by 15 percent to $1.15 per share from $1.00.

Separately, Keurig Green Mountain said its Chief Financial Officer Frances Rathke will leave the company in 2015 after 11 years of service. As part of the succession plan, the company has engaged an executive search firm.

Rathke will continue to serve as CFO and Treasurer until a replacement is appointed, at which time Rathke will serve in the new role of Strategic Advisor, as a part of transition.

GMCR closed Wednesday's trading at $153.95, down $3.15 or 2.01%, on the Nasdaq. The stock further dropped to $2.89 or 1.88% in the after-hours trade.