Starbucks Shares Rise After Q3 Results Top Expectations, Buyback Announcement

Starbucks Corp. shares rose almost 3% in after-hours trading on Thursday after the coffee-house chain reported better-than-expected fiscal third-quarter profit and sales. Net income in the quarter ended June 28 rose to $626.7 million, or 41 cents a share, from $512.6 million, or 34 cents, a year earlier. Excluding items, the company said it reported profit of 42 cents a share. That topped the 41-cent FactSet consensus. Total revenue rose 18% to $4.88 billion, also topping FactSet consensus of $4.87 billion. Starbucks cut its fourth quarter profit outlook to reflect the acquisition of Starbucks Japan and the redemption of debt. Excluding those items, the company kept fourth-quarter profit outlook of 42 cents to 43 cents a share. Analysts surveyed by FactSet were looking for profit of 43 cents a share. Starbucks also said it plans to buy back additional 50 million shares on top of 11 million shares that remain available for purchase under an existing authorization. It also inked a deal with PepsiCo Inc. to sell Starbucks ready-to-drink coffee and energy drinks in Latin America.