Q2 Preview: Green Mountain (GMCR) to Beat on Caffeine Addictions, K-Cup Convenience/Cuteness

Green Mountain Coffee Roasters (Nasdaq: GMCR) shares are lower Wednesday heading into the K-Cup makers second-quarter 2012 report. Click here to go to Green Mountain's webcast page for the quarterly results.

After the market closes, Green Mountain is expected to report EPS of 64 cents on revs of $971.7 million. Numbers compare with EPS of 48 cents and revs of $647 million reported in the same period last year and EPS of 60 cents and revs of $1.16 billion for its first quarter of 2012.

Shares of Green Mountain moved 4.4 percent higher through the quarter to $46.84 at the end of March. In the corresponding period last year, Green Mountain shares were about 88 percent higher.

Traders might be taking a cue from Starbucks (Nasdaq: SBUX), which reported a one-cent bottom-line beat in its quarterly report.

For the most part, analysts are positive on Green Mountain. Current Bloomberg data has nine analysts at Buy, four with a Hold, and one at Sell. The analyst price target average is $86, which ranges from $65 to $125. At current trading levels, the average represents about 75 percent of upside.

Analyst Comments

• Dougherty & Co. sees EPS of 60 cents per share and revs of $971.6 million. K-Cup revs should be $728 million with brewer shipments of 1.45 million units. The firm commented: "GMCR noted its December quarter brewer unit sales were over half of what it sold in all of 2011 and such growth in the installed base creates challenges in projecting future portion pack demand. We believe the business has surprised GMCR in each of the last three quarters (upside in June and December and downside in September) and it has become increasingly difficult for the company to project its short-term performance. While an admission of lack of predictability is not comforting to investors, that fact that big brewer placements are adding to short-term projection challenges makes sense – there are worse problems to have."
  
  
• KeyBanc is looking for EPS of 67 cents, net sales of $958 million, and 2 million brewers sold in the quarter. KeyBanc sees about 1.9 billion K-Cups being sold with an implied attachment rate of 1.63, leading to overall sales of $696 million. The firm said, "Last installed base estimate by GMCR (provided at the end of the September 2011 quarter) was 7 million-9 million. Since then the Company sold roughly 4.2 million brewers in the December quarter, but has not provided an update for its installed base."

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Green Mountain's past performance at Streetinsider's Green Mountain's Income Statement.

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