Green Mountain Beats Earnings Estimates, Stock Tanks On Weak Sales Guidance

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UPDATE: Green Mountain's earnings release is out.

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The company reported earnings of $0.76 per share versus estimates of $0.65.

Sales came right in line with analysts' estimates and company guidance of $1.33 billion.

The company sees sales growth of 14 to 18 percent year-over-year in the coming quarter. It offered guidance of $1.03 billion in sales, below analysts' estimates of $1.06 billion.

EPS is expected to come in a range of $0.70-0.75 next quarter, says Green Mountain. Analysts were expecting $0.72 EPS.

Right now, the stock is trading down more than 8 percent in after-hours trading.

Below is Green Mountain's outlook (from the press release):

“For the remainder of the year, we expect to see continued year-over-year gross margin improvement due to lower green coffee costs and ongoing brewer quality improvements,” said Kelley. “While we expect growth will continue to moderate in the overall total coffee and espresso maker category, we also expect our share of the category to continue to increase driving further expansion of our installed Keurig® brewer base. Consistent with our previous outlook, we estimate total fiscal year 2013 net sales growth in the range of 15% to 20% over fiscal year 2012.”

Company Estimates for Second Quarter and Fiscal Year 2013

The Company provided its outlook for its second quarter of fiscal year 2013 as follows:

  • Total second quarter fiscal year 2013 net sales growth in the range of 14% to 18% over the second quarter of fiscal year 2012.
  • Second quarter fiscal year 2013 non-GAAP earnings per diluted share in a range of $0.70 to $0.75 per diluted share, excluding the amortization of identifiable intangibles related to the Company’s acquisitions; any acquisition-related transaction expenses; and, legal and accounting expenses related to the SEC inquiry and the Company’s pending securities and stockholder derivative class action litigation.
  • The Company’s second quarter of fiscal year 2013 non-GAAP earnings per diluted share estimate includes the impact of shares repurchased prior to January 31, 2013 as part of its previously announced share repurchase program, but excludes any impact from potential future Company share repurchases.

The Company reiterated its net sales growth and free cash flow estimates and refined its non-GAAP earnings per share and capital expenditure outlook for its fiscal year 2013 as follows:

  • Total fiscal year 2013 net sales growth in the range of 15% to 20% over fiscal year 2012.
  • Fiscal year 2013 non-GAAP earnings per diluted share in a range of $2.72 to $2.82 per diluted share, revised from prior estimates of $2.64 to $2.74, and excluding the amortization of identifiable intangibles related to the Company’s acquisitions; any acquisition-related transaction expenses; and legal and accounting expenses related to the SEC inquiry and the Company’s pending securities and stockholder derivative class action litigation.
  • The Company’s fiscal year 2013 non-GAAP earnings per diluted share estimate includes the impact of shares repurchased prior to January 31, 2013 as part of its previously announced share repurchase program, but excludes any impact from potential future Company share repurchases.
  • Free cash flow in the range of $100 million to $150 million.
  • Capital investment in the range of $350 million to $400 million, revised from prior estimates of $380 million to $430 million.

Click here for the full release >

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ORIGINAL: Heads up: Green Mountain Coffee Roasters is minutes away from reporting fourth-quarter earnings. The release is due out sometime after the closing bell at 4 PM ET.

Analysts expect earnings to rise to $0.65 per share in Q4, up from $0.59 per share in Q3 (in line with company guidance).

Sales are expected to rise to $1.33 billion, slightly below company guidance for $1.34 billion but up from the $946.7 million in revenues collected in Q3.

The stock remains a controversial pick among investors.  Green Mountain has been involved in a spat with high-profile hedge fund manager David Einhorn, who in late 2011 announced he was short the stock and called into question a number of the company's practices, including possible fraud.

However, the stock has rebounded since November 2012 when the company appointed a new CEO and boosted its earnings guidance for 2013.

On the other hand,  patents on Green Mountain's popular "K-Cup" recently expired, leaving the door open for others like Starbucks to move into the market.

We will have the full release after the closing bell at 4 PM ET. Click here to refresh for LIVE updates >

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