Green Mountain Coffee; Success In Market

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.

Green Mountain Coffee Gains On Keurig Deal With Wal Mart!

Green Mountain Gains on Keurig Deal With Wal-Mart

By Courtney Dentch

April 30 (Bloomberg) -- Green Mountain Coffee Roasters Inc. had a record gain in Nasdaq trading after announcing Wal-Mart Stores Inc. will carry its Keurig single-cup coffee makers.

Green Mountain climbed $19.58, or 37 percent, to $72.31 at 4 p.m. New York time on the Nasdaq Stock Market, the biggest rise since the company began trading in September 1993. The stock has gained 87 percent this year.

Wal-Mart, the world’s largest retailer, will carry the discount Keurig coffee makers and the individual servings of coffee grounds in more than 3,000 U.S. stores, making Green Mountain’s machine the only such coffeemaker on its shelves, the companies said yesterday after U.S. markets closed. The deal could add 62 cents a share in royalty payments this year, wrote Mitchell Pinheiro, an analyst with Janney Montgomery Scott LLC in Philadelphia.

“Wal-Mart’s presence in discount K-Cup sales will likely be the catalyst that catches the attention of the major grocery chains,” Pinheiro wrote in a note to investors today. He recommends buying Green Mountain stock.

The Waterbury, Vermont-based company also posted second- quarter net income and sales that topped analysts’ estimates. Profit more than doubled to $13 million, or 50 cents a share, from a year earlier, the company said yesterday. Sales rose 60 percent to $193.4 million.

The average of five analysts’ estimates compiled by Bloomberg was for profit of 35 cents on sales of $181.3 million.

To contact the reporter on this story: Courtney Dentch in New York at cdentch1@bloomberg.net.