NEW YORK (AP) — Analysts for Suntrust and Lazard Capital Markets on Wednesday raised their guidance for Green Mountain, citing the beleaguered coffee company’s stronger-than-expected fourth quarter. Its shares surged in premarket trading.
Analyst Bill Chappell said the positive financial results indicate Green Mountain is well positioned for a positive holiday season. He increased his 2013 estimates to $2.70 per share from $2.52. Lazard analyst Matthew DiFrisco raised his 2013 estimate to $2.80 from $2.60. Both kept their “Buy” ratings.
Chappell’s move came after Green Mountain Coffee Roasters Inc., based in Waterbury, Vt., said it earned $91.9 million, or 58 cents per share, for the quarter that ended Sept. 29. That’s up from $75.4 million, or 47 cents per share, in the year-ago period. After adjusting for costs tied to a regulatory inquiry and other special items, the company earned 64 cents per share in the most recent quarter. That handily beat the 48 cents per share that Wall Street expected, according to FactSet.
Total revenue increased 33 percent to $946.7 million from $711.9 million on stronger sales and price increases for its single-serve coffee packs. Analysts were expecting revenue of $902.7 million.
Its shares rose $6.45, or 23 percent, to $35.40 in premarket trading Wednesday. Its shares are down sharply from their 52-week high of $71.15 in mid-February. They fell as low as $17.11 in late July.
Green Mountain was the pioneer in single-serve coffee makers in the U.S. with its Keurig system but began to struggle as competitors came out with their own versions and its key patents expired. It also has faced a multi-year U.S. Securities and Exchange Commission inquiry into its accounting practices
However, Green Mountain has hired a top executive from Coca-Cola Co. as its new CEO, added new brewer models and expanded the array of single-serve beverage packets it sells. And DiFrisco noted that Green Mountain plans to boost its marketing budget next year. Chappell said the company is well positioned for new leadership.