Here’s Why Keurig Shares Are up So Much Today

November 19, 2015, 5:20 PM UTC
Non-Recyclable Keurig Coffee Pods Come Under Fire--And Continue To Sell
MIAMI, FL - MARCH 05: In this photo illustration, Keurig Green Mountain Inc. K-Cup coffee packs are seen on March 5, 2015 in Miami, Florida. John Sylvan the inventor of the popular Keurig K-Cups is reported to have said that he regrets making the non-recyclable, single-serve coffee pods, because they are bad for the environment. (Photo Illustration by Joe Raedle/Getty Images)
Photograph by Joe Raedle — Getty Images

Keurig Green Mountain, the maker of K-Cup single-serve coffee pods, posted a drop in net income for the fiscal fourth quarter, but topped earnings per share and revenue estimates, sending shares up about 25% Thursday as the company has sought to cut costs and rebound from recent sales declines of its pods and brewers.

Net income attributable to Keurig (GMCR) fell to $94.6 million, or 61 cents a share, in the fourth quarter ended Sept. 26, from $141.1 million, or 86 cents a share, a year earlier.

When adjusted for items such as restructuring expenses, the company earned 85 cents a share.

Net sales fell to $1.04 billion from $1.20 billion.

Analysts surveyed by Thomson Reuters expected adjusted earnings per share of 70 cents and revenue of $1.03 billion in the quarter.

“I’m particularly pleased with the benefits realized from our cost reduction efforts as well as our strong cash generation, both of which exceeded expectations in the fourth quarter,” said Keurig CEO Brian Kelley in a statement.

Keurig said in August that it expects to reduce its workforce by about 5% in an effort to cut costs.

The company said that for its fiscal year 2016, it expects sales growth of flat to low single-digits when adjusted for currency, and adjusted earnings of $3.25 to $3.45 per share.