Green Mountain Squashed on Revenue Miss

Shares of Green Mountain Coffee Roasters(GMCR) tanked in late trades on Wednesday after the K-Cup king missed Wall Street's revenue expectations by a wide margin with its fiscal fourth-quarter results.

Despite growing the top line by more than 90% on a year-over-year basis, Waterbury, Vt.-based Green Mountain's revenue total of $711.9 million for the quarter was more than 6% below the average estimate of analysts polled by Thomson Reuters for revenue of $760.5 million.

With Green Mountain shares having more than doubled in the past year and a rich forward price-to-earnings multiple of 25.6X, the stock was hit hard in after-hours action, losing more than 31% to $46.06 on volume of more than 6 million, according to Nasdaq.com.

The company basically blamed bulk distributors for the shortfall, citing "changes in wholesale customer ordering patterns in our grocery and club channels," while saying that consumer demand has remained steady.

The miss is a shocker for investors because Green Mountain has been a juggernaut on the top line so far this year. It had easily beaten revenue expectations in the previous three quarters, including a blowout beat last time around when it posted revenue of $$717.2 million for its fiscal third quarter vs. the average analysts' view of $606.7 million.

On the bottom line, Green Mountain fell short as well, reporting non-GAAP earnings of $75.3 million, or 47 cents a share, a penny below consensus. It was the company's first miss in at least nine quarters, and stands in stark contrast with its upside surprise of more than 35% in the third quarter when it earned 49 cents a share.

Lawrence Blanford, the company's president and CEO, put on a brave face in the company's press release accompanying ! the resu lts.

"While like most consumer products companies we are watchful of broader consumer sentiment going into the holidays, we remain confident in the Company's growth potential and comfortable reiterating our estimate for fiscal year 2012 non-GAAP earnings per diluted share in a range of $2.55 to $2.65," Blanford said.

Sales growth is projected between 60-65% for fiscal 2012, the company said, down from the 95% rate seen in fiscal 2011.

The current consensus view for fiscal 2012 is for earnings of $2.62 a share.

The sell-off offers some validation for hedge fund manager David Einhorn, who gave a bearish assessment of the stock in mid-October, criticizing the company's accounting policies and business practices and saying his investment firm, Greenlight Capital, is going short on the shares.

It's been a fast fall for Green Mountain as its stock hit a 52-week high of $115.98 on Sept. 20.

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