Wall Street Watch: Green Mountain Coffee Earnings Brewed Up Strong

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Green Mountain CoffeeGreen Mountain Coffee Roasters (GMCR) isn't dead after all.

Shares of the company behind the Keurig single-cup brewer and the K-Cup refills that keep hot blasts of coffee, tea, and other beverages coming were hot and caffeinated after posting blowout quarterly results after Tuesday's market close.

Revenue soared 33 percent to $946.7 million and adjusted earnings raced 36 percent higher to $0.64 a share. Analysts were actually expecting essentially flat earnings growth for the period.

Java sippers aren't tiring of the company's flagship machine, judging by a 30 percent increase in brewer and accessory sales. Folks are also using the Kuerig brewers more given the surprising 47 percent pop in K-Cup portion packs.

There was an extra week in the fiscal period, but Green Mountain still would've grown net sales and adjusted earnings at a roughly 20 percent clip. It should also be pointed out that analysts aren't dummies. They were modeling the extra week in their projections.

Things will get challenging for Green Mountain now. Patent protection on its K-Cups expired in September. However, the company is still eyeing 15 percent to 20 percent net sales growth for the next fiscal year. Green Mountain is also raising its profit guidance for fiscal 2013.

Like a strong cup of Joe in the morning, Green Mountain's report is a welcome caffeinated blast at a time when investors needed it the most.

Other Things Worth Watching

• Is Groupon's (GRPN) next hot deal the search for a new CEO? Tech investing blog AllThingsD is reporting that the company's board is exploring an executive shakeup that may not spare the company's founding CEO. It may be an odd time to talk about rattling Groupon. The shares have closed higher in eight of the past nine trading days.

• PVH (PVH) put out a casually dressed quarterly report that looks better at the bottom than the top after Tuesday's close. The fashionable apparel giant behind Tommy Hilfiger and Calvin Klein scored a profit of $2.24 a share -- up sharply from last year's $1.54 a share showing -- on flat revenue of $1.6 billion.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article, except for Green Mountain. The Motley Fool owns shares of and has created a synthetic short position on Green Mountain Coffee Roasters. Motley Fool newsletter services have recommended buying shares of Green Mountain Coffee Roasters and creating a bear put spread position in the company.



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dolfin1943

They have been ripping the public off for a long time. About .50 per cup of coffee at home using their cups. Cannot wait until protection of K-cups expire. Expect Green Mountain to fall apart or drop the price which they won't.

November 28 2012 at 8:37 AM Report abuse +1 rate up rate down Reply
1 reply to dolfin1943's comment
Laura Zeisel

You need to update your info; the K-cup patent already expired.

November 28 2012 at 9:52 AM Report abuse rate up rate down Reply