Keurig Green Mountain Shares Tumble On Downbeat Earnings, Forecast

Shares of

dipped more than 16 percent in after-hours trading after the company reported downbeat results for its fiscal second quarter and issued a weak outlook. The Waterbury, Vermont-based company reported a quarterly profit of $155.5 million, or $0.97 per share, compared to $162.1 million, or $1.03 per share, in the year-ago period. Excluding non-recurring items, the company's adjusted earnings came in at $1.03 per share. Its revenue gained 2.1 percent to $1.13 billion. However, analysts were expecting earnings of $1.05 per share on revenue of $1.15 billion. The average estimate among 35 Estimize users was for earnings of $1.07 per share and revenue of $1.17 billion. Net sales for the domestic segment rose 3 percent in the latest quarter, while sales in the Canada segment shrank 5 percent. Total pod net sales climbed 7 percent, while brewers and accessories net sales slipped 23 percent in the quarter. During the second quarter, Keurig Green Mountain repurchased a total of 7.0 million shares at a cost of $837 million. The company's board declared a regular quarterly cash dividend of $0.2875 per share. President and CEO, Brian Kelley said, "Although we are lowering our guidance to reflect the impact of near-term challenges related to this complex product transition, we remain highly confident in our long term strategy for the Keurig hot system and continue to believe there is a significant runway of opportunity. Combined with the upcoming launch of our Keurig KOLD system, we expect the Keurig brand to further expand and globalize while continuing to transform the premium home beverage experience for consumers." For the full fiscal year, Keurig Green Mountain projects adjusted earnings-per-share to drop in the mid-single digits and sales growth of flat to low-single digits. Analysts had expected EPS to rise 4.3 percent and sales to gain 5.9 percent. For the current quarter, the company expects adjusted earnings of $0.75 to $0.80 per share and net sales to rise in the flat to up low-single digit range versus the year-ago quarter. Analysts had projected earnings of $1.08 per share. Keurig Green Mountain also named Peter G. Leemputte as Chief Financial Officer. Keurig Green Mountain shares fell 16.54 percent to $90.20 in the after-hours trading session.