Green Mountain 4Q profit up, revenue disappoints

AP News
Posted: Nov 09, 2011 9:02 PM
Green Mountain 4Q profit up, revenue disappoints

Green Mountain Coffee Roasters Inc.'s fourth-quarter profit nearly tripled as sales of its single-serve coffee products and its overall revenue soared. But the revenue was lower than analysts expected, and the company's shares sank more than one-third after hours Wednesday.

Green Mountain's revenue increased 91 percent to $711.9 million. But analysts on average anticipated revenue of $760.5 million, according to FactSet.

The shares fell $23.62, or 35.2 percent, to $43.40 on the news, which the company released after regular trading ended.

Green Mountain said it earned $75.4 million, or 47 cents per share, for the quarter that ended Sept. 24. That's compared with $27 million, or 20 cents per share, a year earlier. Its earnings met analysts' average forecast.

Green Mountain has been an industry leader recently as its Keurig single-cup coffee system has grown in popularity and it developed key partnerships with Starbucks Corp. and others.

But the company came under close scrutiny in October after hedge fund manager David Einhorn took issue with its imminent patent expirations, accounting restatements and a Securities and Exchange Commission inquiry. Other analysts shrugged off the critique.

The company said Wednesday that its third-quarter revenue came in below estimates as orders from wholesale grocery and club customers softened, despite strong consumer demand at those retailers and a big increase overall.

"Like most consumer products companies, we are watchful of broader consumer sentiment going into the holidays, we remain confident in the company's growth potential," President and CEO Lawrence J. Blanford said in a statement.

Green Mountain said its revenue from portion packs, brewers, accessories and other products increased during the period. Its royalties slipped due to the 2010 acquisition of Van Houtte, a Canadian coffee roaster that use to pay royalties to Green Mountain.

The company's profit margin rose during the quarter, helped by price hikes that helped offset higher costs for unroasted beans.

Green Mountain earned $201 million, or $1.36 per share, for the full fiscal year, versus $138.8 million, or 58 cents per share, in fiscal 2010. Excluding one-time items, Green Mountain earned $1.64 per share, up from 77 cents per share. Revenue rose 95 percent to $2.65 billion.

The company, based in Waterbury, Vt., reiterated its forecast for fiscal 2012 adjusted earnings of $2.55 to $2.65 per share. Analysts expect $2.59 per share.

The company said it expects to invest heavily in its plants and improving its production capacity during the year.

Over the past 12 months, shares of Green Mountain have traded as low as $29.55 and touched a peak of $115.98 less than two months ago in mid-September.