SBUX Starbucks Corporation

By Dave Sebastian

Shares of Keurig Dr Pepper fell 5.3% in premarket trading after it reported lower-than-expected net income and sales for the fourth quarter.

The maker of Dr Pepper, Snapple, Keurig coffee systems and other items on Thursday reported earnings of 29 cents a share, compared with 19 cents a share in the prior year. Analysts polled by FactSet were expecting 34 cents a share.

Adjusted earnings were 35 cents a share, meeting analysts' expectations.

The company reported sales of $2.93 billion, compared with $2.81 billion in the prior year. Analysts polled by FactSet were expecting $2.96 billion.

Coffee-systems sales rose to $1.21 billion from $1.16 billion, and packaged-beverages sales rose to $1.21 billion from $1.18 billion.

Keurig Dr Pepper expects sales growth to accelerate to 3% to 4% in 2020, compared with its merger target of 2% to 3%. It sees adjusted earnings growing 13% to 15%, or $1.38 a share to $1.40 a share.

Keurig Dr Pepper on Thursday also said it has entered an agreement with Nestlé USA to make and distribute Starbucks Corp.-branded Keurig K-Cup pods in the U.S. and Canada.

Nestlé acquired rights to market and distribute Starbucks packaged goods and foodservice products globally outside of Starbucks stores. The new pact replaces an earlier agreement between Keurig Dr Pepper and Starbucks.

Write to Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

February 27, 2020 09:04 ET (14:04 GMT)

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