Green Mountain Coffee Grounded — Wednesday’s IP Market Recap

GMCR hammered by 40% on weak K-Cup sales, lowered forecast

   
Green Mountain Coffee Grounded — Wednesday’s IP Market Recap

IPMarketRecap Green Mountain Coffee Grounded    Wednesdays IP Market RecapWednesday’s biggest splash came after the bell, as Green Mountain (NASDAQ:GMCR) got hammered on weak K-Cup sales and lowered full-year expectations.

The company reported second-quarter K-Cup sales growth of 59%, but that was a huge step down from 115% growth last quarter. Green Mountain also downgraded its earnings forecast from a range of $2.55 to $2.65 per share to a range of $2.40 to $2.50 per share.

The company’s Q2 earnings weren’t as dour, with profits up more than 40% to $93 million (58 cents per share), and adjusted earnings of 64 cents per share in line with analyst estimates. Revenues of $885.1 million were up 37% but widely missed estimates of $971.7 million. Still, investors slammed GMCR shares by 40% in early after-hours trading.

During the day, a disappointing jobs report weighed on the broader markets. Payroll giant ADP reported a disappointing 119,000 jobs were added to the economy in April, far below a forecast of 170,000 and March’s 201,000. The news from Europe wasn’t any better, as eurozone unemployment rose to 11%.

The Dow finally came to rest down fractionally at 13,268, while the S&P settled lower by 0.25% at 1,402. The Nasdaq managed to squeeze out a gain, rising 0.31% to 3,059.

While economic news overshadowed the day, several companies — including Comcast (NASDAQ:CMCSA), CBS (NYSE:CBS), CVS Caremark (NYSE:CVS) and Time Warner (NYSE:TWX) — all posted solid results for the quarter.

TWX rode increased subscriptions and popular movie releases to post improved revenues and adjusted earnings per share higher than analyst estimates, while Comcast’s NBC Universal division and their Super Bowl broadcast powered the company’s earnings over both last year’s results and analysts’ estimates. However, both stocks dropped for the day, with TWX losing 1.6% and CMCSA down 0.6%.

CBS fell in line with the other media companies as both revenues and earnings came in higher than last year and beat forecasts. CBS also bucked the media stock price decline, rising 2.3% on the day.

Drug store chain CVS beat both top- and bottom-line estimates, as Walgreen (NYSE:WAL) customers caught in the middle of a dispute with Express Scripts (NASDAQ:ESRX) walked on over to CVS to get their prescriptions filled. CVS rose 2.7% on the day’s news.

MasterCard (NYSE:MA) reported first-quarter revenue of $1.76 billion, up from $1.5 billion in the year-ago period, while net income came in at $5.36 per share compared to $4.31 last year — both metrics were in line with expectations, though shares fell about 1% Wednesday. Reporting after the bell, Visa (NYSE:V) said fiscal second-quarter profit surged 47% as customer spending on credit and debit cards rose. Visa shares were up more than 3% in early after-hours trading.

Earnings release notables for Thursday include General Motors (NYSE:GM), Viacom (NASDAQ:VIAB), Orbitz (NYSE:OWW) and Sara Lee (NYSE:SLE).

Three Up

  • Charming Shoppes (NASDAQ:CHRS): Up 24% ($1.40) to $7.30. (Read more about CHRS here.)
  • American Eagle (NYSE:AEO): Up 16.6% ($2.97) to $20.86.
  • Zynga (NASDAQ:ZNGA): Up 6% (52 cents) to $8.98.

Three Down

  • Chesapeake Energy (NYSE:CHK): Down 14.6% ($2.86) to $16.74. (Read more about CHK here.)
  • Sandridge Energy (NYSE:SD): Down 9.73% (78 cents) to $7.24.
  • Herbalife (NYSE:HLF): Down 6.36% ($3.58) to $52.72.

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he did not hold any position in the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2012/05/economys-tale-wags-the-dows-dog-wednesdays-ip-market-recap-adp-cmcsa-cbs-cvs-twx-wal/.

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