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GMCR Falls to 18-Month Low After Earnings

Green Mountain Coffee Roasters (Nasdaq: GMCR) is in the midst of an Apocalyptic freefall after today's earnings announcement.

Shares of the Vermont-based specialty coffee company have fallen 40% in after-hours trading. That puts the stock at less than $30 a share for the first time since October 2010. GMCR’s previous 52-week low was $39.42. The stock opened the day at just a few cents below $50 a share.

Poor earnings weren’t responsible for Green Mountain’s epic retreat. Excluding items, earnings per share for the company’s fiscal second quarter were 64 cents, well ahead of the 48 cents a share it earned in the same quarter last year. Earnings were also in line with analyst estimates.

What has been GMCR’s undoing, however, is its poor revenue. Sales of the company’s signature K-Cups fell short of what analysts were expecting, resulting in $885 million of revenue – more than $100 million less than the $972 million Wall Street was calling for.

The $885 million in revenue was actually a 37% improvement from a year ago. But it wasn’t enough to offset the major revenue shortfall.

This is a new low for a stock that has had an astonishingly bad seven and a half months. Last September, GMCR was a darling of the stock market, reaching a high of $11.62 per share on September 19. Then the bottom fell out.

Esteemed hedge fund manager David Einhorn slammed the company at the Value Investing Congress in October, highlighting a laundry list of concerns. That precipitated a month-long freefall, pushing Green Mountain stock all the way down to $40.89 per share.

The stock had since stabilized, vaulting back up to $70 a share after a strong first-quarter earnings report in early February. It soon fell back down to $50 and then $40 a share, vacillating between the two over the past month.

Now GMCR has reversed course again.