Green Mountain Coffee Roasters Inc (GMRC), the maker of Keurig brewing systems and K-cup coffee pods, forecast first-quarter profit below analysts' estimates as it battles stiff competition from coffee pod makers.
The company, which reported better-than-expected quarterly results, said its board approved a new share repurchase program of up to $1 billion.
Green Mountain shares rose 5 percent in extended trading.
Some of Green Mountain's patents on its single-serve coffee pods expired last year, allowing companies such as TreeHouse Foods Inc and Caribou Coffee Co Inc and private-label firms to launch their own products.
Green Mountain sells its brewers virtually at cost to fuel adoption of its system. A majority of the company's profits comes from K-cups.
Green Mountain said it expected net sales growth of low-to-mid single digits in the first quarter due to competition from unlicensed coffee pods and the impact of a weaker Canadian dollar.
The company forecast adjusted earnings of 85-90 cents per share. Analysts on average were expecting 96 cents per share, according to Thomson Reuters I/B/E/S.
Strong sales of K-cups and lower green coffee costs helped the company report better-than-expected results for the fourth quarter.
Net income rose to $127 million, or 83 cents per share, in the quarter ended Sept. 28 from $91.9 million, or 58 cents per share, a year earlier.
On an adjusted basis, Green Mountain earned 89 cents per share, beating the average analyst estimate of 75 cents.
Revenue rose 11 percent to $1.05 billion, above analysts' estimates of $964.6 million. Sales of K-cups rose 11 percent.
Green Mountain shares were up at $64.50 in trading after the bell. The stock has risen 53 percent to Wednesday's close of $61.43 on the Nasdaq.
The company's shares are heavily shorted, with nearly 27 percent of its outstanding shares held in short positions.