This week's edition of Options Spotlight takes a look at Green Mountain Coffee Roasters, Inc. (GMCR: sentiment, chart, options). According to Hoover's, the company offers about 180 varieties of coffee, cocoa, and tea, which it sells to wholesale customers including supermarkets, convenience stores, resorts, and office-delivery services. Among its customers are Exxon Mobil's convenience stores and McDonald's restaurants. Green Mountain coffee is also sold under the Newman's Own Organics brand, as well as its namesake Green Mountain Coffee and the Tully's label.
After the close on April 29, the company announced a distribution partnership with Wal-Mart Stores Inc. (WMT) and also posted strong quarterly results. The mega-retailer plans to distribute GMCR's flagship Keurig Single-Cup Brewing System in more than 3,000 of its stores.
Meanwhile, Green Mountain Coffee Roasters Inc. reported that its fiscal second-quarter net income more than doubled on soaring sales. Earnings rolled in at $13 million, or 50 cents per share, from $5.96 million, or 23 cents a share, a year earlier. Net sales jumped 60% to $193.4 million. Analysts were looking for earnings of 36 cents per share on revenue of $178 million. Gross margin dropped to 32.1% from 37%.
The Keurig coffee maker also boosted its 2009 outlook. Excluding charges related to litigation with Kraft Foods Inc. (KFT), Green Mountain expects 2009 per-share earnings of $1.47 to $1.53, up from its January estimate of $1.25 to $1.35. It also raised its estimate for sales growth to 58% to 61% from 43% to 48%. For the fiscal third quarter, the company expects earnings of 38 cents to 42 cents per share, including 4 cents in charges for amortization, on sales growth of 61% to 66%. Analysts were looking for 39 cents in earnings on 39% sales growth.
In the Options Spotlight, I shine a light on what's happening in the options world. In the case of the Green Mountain Coffee Roasters, put activity has been brisk on the shares as investors attempt to call a top to the security's climb up the charts. Has this stock's ascent finally reached an end? For a closer look at Green Mountain Coffee Roasters and its sentiment backdrop, please click for the video button.
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