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Keurig Green Mountain Shares Dip Following Q3 Results

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Keurig Green Mountain Inc (NASDAQ: GMCR) reported better-than-expected earnings for its fiscal third quarter, but the company's sales missed analysts' estimates. The company also issued a weak forecast.

The Waterbury, Vermont-based company reported quarterly net income of $113.6 million, or $0.73 per share, down from $155.2 million, or $0.94 per share, in the year-ago period. Excluding one-time items, the company's non-GAAP earnings came in at $0.80 per share.

Its revenue declined 5 percent year-over-year to $969.5 million. However, analysts were expecting earnings of $0.79 per share on revenue of $1.04 billion.

The average estimate among 51 Estimize users was for earnings of $0.82 per share and revenue of $1.04 billion.

Pod sales declined 1 percent year-over-year in the quarter, while brewers and accessories sales dropped 26 percent.

Net sales for the domestic segment shrank 4 percent for the quarter, while sales in the Canada segment fell 14 percent on a reported basis.

Its gross margin shrank 750 basis points to 36.0 percent of net sales in the quarter.

"While we are not pleased with our revenue growth, we delivered earnings at the high end of our previous guidance," commented President and CEO, Brian Kelley. "We are taking decisive actions to adapt and compete more effectively in today's rapidly-evolving, dynamic marketplace. We are implementing a multi-year productivity program that we are confident will enhance our operational effectiveness and enable us to fund incremental investment in innovation and brand building."

The company's board declared a regular quarterly cash dividend of $0.2875 per share.

Keurig Green Mountain announced a $1 billion stock repurchase program and announced its plans to lower around 5 percent of its workforce.

The company expects Q4 adjusted earnings of $0.70 to $0.75 per share, versus analysts' estimates of $0.97 per share.

It also projects FY15 adjusted EPS to decline in low teens range and net sales to drop in low-single to mid-single-digits.

Keurig Green Mountain shares tumbled 25.97 percent to $55.51 in the after-hours trading session.

Posted-In: profitEarnings News Guidance


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