Keurig Green Mountain Beats Fiscal 4Q15 Estimates
EPS beats estimates by 19%
Keurig Green Mountain (GMCR) reported EPS (earnings per share) of $0.85 in fiscal 4Q15, beating analyst estimates by 19.7%. In fiscal 4Q14, Keurig reported EPS of $0.94. EPS for 4Q15 declined by 10%. On a full-year basis, the company reported EPS of $3.56 compared to $3.97 in fiscal 2014.
What drove the earnings?
Keurig reported EPS above its earlier mentioned guidance range of $0.70–$0.75. Its cost reduction efforts, lower share base, and lower effective tax rate drove the earnings, partly offset by the stronger dollar that had an unfavorable impact of about $0.03 on EPS.
The analysts that follow Keurig are expecting it to grow earnings at an average annual rate of 15.5% over the next five years. This year, analysts are forecasting an earnings fall of 6.4% over last year. Analysts expect earnings growth next year of 7.8% over this year’s forecast earnings.
Share repurchases
On July 31, 2015, Keurig Green Mountain (GMCR) approved a share repurchase program of up to an additional $1 billion over the next two years. The company repurchased 9.5 million shares in fiscal 2015 at a cost of $1,033 million. It included 2.0 million shares repurchased in the fiscal fourth quarter at a cost of $115 million.
The company repurchased an additional 4.4 million shares at a cost of $235 million from its fiscal 2015 end through November 18, 2015. As of November 18, the company has $914 million remaining in its share repurchase authorization.
Dividend declaration
Keurig also announced a 13% increase in its indicated annualized dividend to $1.30 per share from $1.15. This dividend increase will be effective on February 16, 2016, with a quarterly dividend payment of $0.33 payable to shareholders of record as of the close of business on January 15, 2016. This dividend increase reflects the company’s commitment to return capital to shareholders and its expectation for continued strong cash flow generation.
Keurig’s rivals in the industry include Mead Johnson Nutrition (MJN), Flowers Foods (FLO), and B&G Foods (BGS). They reported EPS of $0.80, $0.24, and $0.34, respectively, in their last reported quarters.
The Power Shares Dynamic Market ETF (PWC) and the iShares Global Consumer Staples ETF (KXI) invest 0.39% and 0.47%, respectively, in GMCR stock.
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