Keurig Soars After Topping Estimates, Raising Its Dividend

Keurig Green Mountain Inc. soared 18 percent after beating earnings estimates and boosting its dividend, raising optimism that the company can recover from recent missteps.

Fourth-quarter profit amounted to 85 cents a share, excluding certain items, the Waterbury, Vermont-based company said in a statement Wednesday. Analysts had estimated 71 cents on average, according to data compiled by Bloomberg. Keurig raised its quarterly dividend 13 percent to 32.5 cents a share.

The results brought a measure of hope to investors after a punishing year for Keurig, which lost almost three-quarters of its market value over the past 12 months. The maker of single-serving coffee systems has suffered from waning sales of its K-Cup containers and lower prices on brewers. A new cold brewer also has been poorly received, and the strong dollar pulled down international sales.

While those challenges were reflected in the fourth-quarter earnings, the company’s cost-cutting efforts bolstered results. Sales also exceeded projections. Keurig reported $1.04 billion in sales during the period, which ended Sept. 26. Analysts had estimated $1.03 billion.

“I’m particularly pleased with the benefits realized from our cost-reduction efforts as well as our strong cash generation, both of which exceeded expectations,” Chief Executive Officer Brian Kelley said in the statement.

The stock gained $7.38 to $47.88 in New York, the biggest rally since February 2014. Earlier this week, the shares were trading at their lowest level in almost three years.

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