Green Mountain Coffee Shares Slammed on Worsened 2011 Forecast
Citing a volatile market, shares of Green Mountain Coffee (NASDAQ:GMCR) continued to tumble more than 10% Friday, hours after it slashed its fiscal 2011 earnings outlook.
The Waterbury, Vt-based company posted on Thursday net income of $27 million, or 20 cents a share, up 92% compared with $14.1 million, or 11 cents a share, in the same quarter last year.
Excluding one-time items, the company would have earned 22 cents a share, just ahead of average analyst estimates polled by Thomson Reuters of 20 cents.
Revenue for the coffeemaker was $373.1 million, up 73% from $216 million a year ago, beating the Street’s view of $359.18 million.
Despite the strong quarterly results, the company said it sees fiscal 2011 earnings in the range of $1.19 to $1.29 a share, down from its prior estimate of $1.24 to $1.29 a share, though still ahead of its actual 2010 earnings of 70 cents, and 2009 results of 36 cents.
The broadened view, attributed to higher pricing and anticipated lower unit volume, led to a massive sell off, sending its shares sharply lower on Friday.
The earnings exclude any acquisition-related transaction costs or onetime items, however heavy expenses are expected to derive from its $890 million purchase of Van Houtte, slated to close by the end of this year, and heavy legal costs from its pending litigation with the SEC.
Sales, meanwhile, are expected to grow in the range of 45% to 53%, up from its earlier forecast of 44% to 50%, providing the company with flexibility to support anticipated new product launches.
“The GMCR team remains focused, continuing to execute in a way that enables us to capitalize on what we believe is substantial opportunity for growth,” said Green Mountain CEO Lawrence J. Blanford.
Earnings for the period ended Sept. 25 were fueled by strong sales of its Keurig Single-Cup system, which makes up about 6% of the 90 million coffee-drinking households in the US, the company said, noting there is “room to expand.”