Green Mountain Gains on Keurig Deal With Wal-Mart
By Courtney Dentch
April 30 (Bloomberg) --
Green Mountain Coffee Roasters Inc. had a record gain in Nasdaq trading after announcing Wal-Mart Stores Inc. will carry its Keurig single-cup coffee makers.
Green Mountain climbed $19.58, or 37 percent, to $72.31 at 4 p.m. New York time on the Nasdaq Stock Market, the biggest rise since the company began trading in September 1993. The stock has gained 87 percent this year.
Wal-Mart, the world’s largest retailer, will carry the
discount Keurig coffee makers and the individual servings of coffee grounds in more than 3,000 U.S. stores, making Green Mountain’s machine the only such coffeemaker on its shelves, the companies said yesterday after U.S. markets closed. The deal could add 62 cents a share in royalty payments this year, wrote Mitchell Pinheiro, an analyst with Janney Montgomery Scott LLC in Philadelphia.
“Wal-Mart’s presence in
discount K-Cup sales will likely be the catalyst that catches the attention of the major grocery chains,” Pinheiro wrote in a note to investors today. He recommends buying Green Mountain stock.
The Waterbury, Vermont-based company also posted second- quarter net income and sales that topped analysts’ estimates. Profit more than doubled to $13 million, or 50 cents a share, from a year earlier, the company said yesterday. Sales rose 60 percent to $193.4 million.
The average of five analysts’ estimates compiled by Bloomberg was for profit of 35 cents on sales of $181.3 million.
To contact the reporter on this story: Courtney Dentch in New York at cdentch1@bloomberg.net.
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