MINYANVILLE ORIGINAL Green Mountain Coffee Roasters (NASDAQ:GMCR), which sells specialty coffee including K-cup portion packs for instant coffee machines, will release its earnings report later today. The company is attempting to turn around its performance by hiring a new CEO, ex-Coca-Cola executive Brian Kelley. This helped the stock regain some of its losses. The stock has been in sharp decline in the last 52-weeks with a high of $71.15. It was down to $17.11 in July and it is currently sitting near the low at around $29.
 
Earnings have been mixed for the last five quarters, showing some growth year-over-year. Analysts have been off four out of the last five, missing two and beating two. Earnings are expected to decrease from last quarter by $0.04 and increase year-over-year by $0.06, which is expected due to the seasonality of the company's earnings in the past.
 
GMCR has been volatile on earnings, moving an average of 34% for the last four quarters, moving up two and down two in response to the earnings report. The ATM straddle is implying about a 20% move, which is less than the historical changes in the stock price.
 
With increased competition and inventory problems continuing, the stock should sell off on earnings.
 
My Trade: Selling the Nov. weekly 32-33 Bear Call Spread for $0.35
 
Risk: $65 per one lot
 
Reward: $35 per one lot
 
Breakeven: $32.35