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TheStreet Open House

Green Mountain Squashed on Revenue Miss

Stocks in this article: GMCR

Updated from 4:47 p.m. ET to include background on hedge fund manager David Einhorn's opinion of the company, latest share price.

NEW YORK ( TheStreet) -- Shares of Green Mountain Coffee Roasters (GMCR) tanked in late trades on Wednesday after the K-Cup king missed Wall Street's revenue expectations by a wide margin with its fiscal fourth-quarter results.

Despite growing the top line by more than 90% on a year-over-year basis, Waterbury, Vt.-based Green Mountain's revenue total of $711.9 million for the quarter was more than 6% below the average estimate of analysts polled by Thomson Reuters for revenue of $760.5 million.

With Green Mountain shares having more than doubled in the past year and a rich forward price-to-earnings multiple of 25.6X, the stock was hit hard in after-hours action, losing more than 31% to $46.06 on volume of more than 6 million, according to Nasdaq.com.



The company basically blamed bulk distributors for the shortfall, citing "changes in wholesale customer ordering patterns in our grocery and club channels," while saying that consumer demand has remained steady.

The miss is a shocker for investors because Green Mountain has been a juggernaut on the top line so far this year. It had easily beaten revenue expectations in the previous three quarters, including a blowout beat last time around when it posted revenue of $$717.2 million for its fiscal third quarter vs. the average analysts' view of $606.7 million.

On the bottom line, Green Mountain fell short as well, reporting non-GAAP earnings of $75.3 million, or 47 cents a share, a penny below consensus. It was the company's first miss in at least nine quarters, and stands in stark contrast with its upside surprise of more than 35% in the third quarter when it earned 49 cents a share.

Lawrence Blanford, the company's president and CEO, put on a brave face in the company's press release accompanying the results.

"While like most consumer products companies we are watchful of broader consumer sentiment going into the holidays, we remain confident in the Company's growth potential and comfortable reiterating our estimate for fiscal year 2012 non-GAAP earnings per diluted share in a range of $2.55 to $2.65," Blanford said.

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