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Better-than-expected earnings could signal a turnaround for one of the most beaten-down stocks on the market.
Green Mountain Coffee Roasters (Nasdaq: GMCR) reported $96 million in first-quarter earnings this afternoon – almost a 300% improvement from the $26 million the Vermont coffee brewer earned in its first quarter a year ago. At $0.60 a share, GMCR’s earnings blew analysts’ estimates of $0.36 a share out of the water. The company’s $1.16 billion in revenue also outpaced the $1.06 billion that was expected.
The decisive earnings beat has sent GMCR’s stock up more than 14% in after-hours trading. At $60 share, Green Mountain Coffee is trading higher than it has since early November.
This is a far cry from what happened to the stock after its last earnings report. Back in November, GMCR’s fourth-quarter revenue fell $50 million short of analyst expectations. That sent the stock tumbling 36%, and capped a nightmare two-month stretch for the former stock market darling.
At the Value Investing Congress in October, hedge funder David Einhorn announced his plans to short-sell Green Mountain Coffee on concerns about the company’s accounting practices, an ongoing SEC investigation and an impending expiration on its K-Cup single-serve packets. The ensuing earnings report proved that some of Einhorn’s concerns were valid, and the stock had been in a tailspin ever since.
Shares of GMCR plummeted from $111.62 on September 19 to a low of $40.89 on November 10 – a 62.5% drop-off in less than two months. The stock slowly crept back up a bit over the last three months, closing at $53.63 today.
But its monster first quarter has GMCR now making its biggest upward move in months.