nelson, re JVA
Higher coffee prices are good news for JVA. Revenues are sure to increase. Earnings will depend on margins. But according to the last earnings PR, they're committed to margin improvement. I think they could put up a .20+ EPS quarter this year...which could send the stock to $10+. Plus they'll have some easy bottom line comps as the company really struggled last year with the drop in coffee prices.
From annual earnings PR on 1/24:
"Although 2013 certainly represents a disappointment to management and our fellow shareholders, our company's overall health should not be measured purely by one metric, net profits. Our history of reporting positive results was disrupted by an unprecedented collapse in the price of green coffee which traded to new seven year lows during our fiscal fourth quarter. Our hedging strategy, which in the past has been an important tool in helping maintain our margins, adversely impacted our results; as there was virtually no abatement in the decline of green coffee prices -- with prices falling by almost sixty percent during fiscal 2013. In addition, our gross sales declined in tandem with these lower commodity prices. However, we believe last year's problems are behind us and 2014 should produce more normalized results in our operations," said Andrew Gordon, President and Chief Executive Officer.
From Q1 earnings PR on 3/14:
"We are extremely pleased to report these positive results to our shareholders. Although coffee prices remained stalled at depressed levels during this period resulting in a 13% decline in revenues, this was offset by a 13.7% increase in poundage sold during the same period. With coffee prices now on the rise again, we believe the combination of higher commodity prices along with continued growth in our overall business should result in increased revenues. Our commitment to margin improvement was evidenced by this quarter's earnings and we will remain focused on continuing these results going forward," said Andrew Gordon, President and Chief Executive Officer.
"Our business continues to remain robust as we have achieved growth in all three major areas: wholesale green coffee sales, branded and private label sales. With the recent increase in the price of green coffee, we expect that these trends will continue to improve due to our position in the marketplace. As we stated in our comments with our 2013 annual results, we believe our recent problems are behind us and we thank our fellow shareholders for their continued patience and support," concluded Mr. Gordon.
