Green Mountain Gains as Quarterly Profit Tops Estimates

Green Mountain Coffee Roasters Inc. (GMCR), the maker of Keurig-brand single-cup pods and machines, reported fourth-quarter profit that surpassed analysts’ estimates as K-Cup and brewer sales rose. The stock jumped the most since May.

Fourth-quarter net income increased 38 percent to $127 million, or 83 cents a share, from $91.9 million, or 58 cents, a year earlier, Waterbury, Vermont-based Green Mountain said yesterday in a statement. Excluding some items, profit was 89 cents a share. Analysts estimated 75 cents, on average.

Chief Executive Officer Brian Kelley has been trying to attract customers with more brands of K-Cup pods and higher-end coffeemakers as grocers including Safeway Inc. and Whole Foods Market Inc. (WFM) introduce private-label single-cup packs. Green Mountain’s single-serve capsule sales rose 11 percent in the quarter, compared with 18 percent growth in the prior quarter. Brewer and accessory sales jumped 27 percent.

Green Mountain rose 14 percent to $70.57 at the close in New York, for the biggest one-day gain since May 9. The shares have added 71 percent this year, while the Standard & Poor’s 500 Index has advanced 26 percent.

First-quarter earnings will be as much as 90 cents a share, the company said. That trailed analysts’ average estimate of 96 cents.

Sales in the first quarter will increase at a “low-to-mid single” digit rate compared with last year “due to difficult brewer and portion pack sales comparisons; the impact of unlicensed packs; and, the currency headwind in Canada,” the company said in the statement.

The company also said yesterday that the board approved a share buyback authorization of as much as $1 billion for the next two years and a $1 a share annual dividend, payable 25 cents a quarter.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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