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Keurig Beats Expectations, But Closes Fiscal Year With Declines In Sales And Income

Keurig Green Mountain stock was down and then up Wednesday, dropping in anticipation of the company’s quarterly earnings report, then moving sharply up after the market closed on word that earnings surpassed analysts’ expectations.

But overall the company’s 2015 revenue picture is marked by declines in sales and revenues. 

The past few earnings reports reflect a new reality for Keurig that is in sharp contrast to the phenomenal success of earlier days.

Investors have responded and by this week the company’s stock price had fallen more than 70 percent compared to the start of the year.

For fiscal 2015, tepid sales of the newest generation 2.0 hot beverage systems have been a drag on revenues, including sales of K-Cups.

“When you’re an innovation company, not everything works perfectly. You try some and you quickly get out of them. We’ve done a couple of those. There’s no question we could have executed and should have executed 2.0 better. We learned; we moved forward,” said CEO Brian Kelley in a quarterly earnings webcast Wednesday.

Kelley says the company has cut costs and improved its products in the past year. He said higher coffee prices have also reduced profits.

Keurig’s fiscal 2015 net income was down compared to the previous year and while revenue from K-Cup sales held relatively steady, brewer and accessory sales fell 23 percent.

In August, the Waterbury-based company cut 330 jobs, mostly in Vermont. This fall the company began the roll out of the Keurig Kold beverage system, which it hopes will be key to its growth in the long term.

Steve has been with VPR since 1994, first serving as host of VPR’s public affairs program and then as a reporter, based in Central Vermont. Many VPR listeners recognize Steve for his special reports from Iran, providing a glimpse of this country that is usually hidden from the rest of the world. Prior to working with VPR, Steve served as program director for WNCS for 17 years, and also worked as news director for WCVR in Randolph. A graduate of Northern Arizona University, Steve also worked for stations in Phoenix and Tucson before moving to Vermont in 1972. Steve has been honored multiple times with national and regional Edward R. Murrow Awards for his VPR reporting, including a 2011 win for best documentary for his report, Afghanistan's Other War.
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