Annual outlook Increased by Green Mountain Coffee

The makers of single serve coffee brewers, Green Mountain Coffee Roasters, increased its complete year outlook for earnings Wednesday following its better than expected second quarter earnings. Green Mountain is the maker of the single-serve Keurig coffee brewers and the special K-Cups used in them.

The company said it had also expanded its business agreement with Starbucks, Corp, which with the earnings report, helped push the price of its stock up more than 16% in afterhours trading. The new agreement with Seattle-based Starbucks is for 5 years and replaces one that was scheduled to run through most of 2014. This new agreement triples the number of drinks Starbucks will offer in K-Cups.

With the signing of the new agreement out of the way, all speculation that Starbucks might break off its relationship with Green Mountain Coffee is ended. There was some speculation that after certain patents at Green Mountain expired, Starbucks would launch its own single serve brewer for its different espresso drinks.

Green Mountain’s net income for the latest quarter reached $132.3 million or the equivalent of 87 cents for each share. Net income was up from last year’s same period of $93 million or the equivalent of 53 cent for each share. Taking out certain items, earnings were 93 cents per share, while Wall Street analysts had predicted Green Mountain’s earning would reach only 74 cents a share.

Net sales were $1 billion, which represented an increase of 14% and were helped by a 21% increase in the sale of its K-Cups, which helped to offset sales of the brewers and accessories that fell by over 10%.



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