Green Mountain Sinks on Outlook
(GMCR story updated with analyst commentary and share price changes)
NEW YORK (
) --
Green Mountain Coffee Roasters'
(GMCR)
shares remain in negative territory after plunging after hours in reaction to the lowering of the company's 2011 earnings outlook.
Shares of the maker of K-Cups and Keurig coffee brewers are down 11.3% to $33.19 in late morning trading.
In Thursday afterhours trading, GMCR dropped 13.7% to $32.30 after the company said it was widening the lower end of its fiscal 2011 non-GAAP earnings outlook to a range of $1.19 to $1.29 a share vs. the prior outlook of $1.24 to $1.29, to factor in volatility in coffee prices and the support needed for the launch of new products.
"The hit was pretty much immediate on release, leaving prices consolidating at or near the initial reaction lows," BGC Financial director Roger Volz said. He'll observing the stock will particular interest if it makes another descent and falls into the $29.90 to $30.50 territory. "Another break below
this area sees risk
of the shares falling back to the $27.25 area, where major support resides."
GMCR expects first-quarter 2011 non-GAAP earnings in the range of 14 cents to 18 cents a share. Analysts, on average, were expecting earnings of 20 cents a share and $1.18 a share for the first quarter and full year, respectively.
"GMCR is a company that's been conservative with guidance in the past and it looks like they were again this quarter,"
TheStreet's
Market Movers portfolio manager Ken Shreve said.
"When you're a high-multiple stock like GMCR, conservative guidance (below expectations), isn't going to cut it. GMCR's mention of higher costs relating to new product launches was also a dampener, Shreve said.
For the fourth quarter, GMCR posted a net income increase of 92% to $27 million, or 20 cents a share, from $14.1 million, or 11 cents a share the same time last year.
Non-GAAP earnings increased 97% to 22 cents a share from 11 cents last year, beating the consensus expectation of 20 cents.
Net sales, driven by Keurig coffee brewers and K-Cups coffee packets, increased 73% to $373.1 million from $216 million last year, exceeding the consenus expectation of $359.2 million.
The quarterly update comes after GMCR announced in late November that it would restate earnings for three fiscal years due to accounting errors discovered during an international investigation ordered by its board audit committee in light of a
Securities and Exchange Commission
inquiry into the company's revenue recognition practices.
>>Green Mountain Coffee: More Accounting Issues Ahead?
>>Green Mountain Shares Spike After Accounting Errors Revealed
>>Search for Highest Dividends by Rate or Yield
More on Earnings Today's Top Earnings |
-- Written by Andrea Tse in New York.
>To contact the writer of this article, click here:
Andrea Tse
.
>To follow the writer on Twitter, go to
.
>To submit a news tip, send an email to:
.
RELATED STORIES:
>>Green Mountain Coffee: More Accounting Issues Ahead?
>>Green Mountain Shares Spike After Accounting Errors Revealed
Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.