Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) is showing good results on the surface for its first fiscal quarter of 2013. Revenue grew 16% and free cash flow was listed as $254 million. Some 4.6 million Keurig Single Cup Brewers were sold by the company and Single Serve-related products rose by 19%. The results come to non-GAAP earnings of $0.76 per share and revenues came to almost $1.34 billion. The Thomson Reuters consensus was $0.65 EPS in $1.33 billion in revenue.

Guidance for the first quarter is calling for sales growth of about 14% to 18% and adjusted earnings of $0.70 to $0.75 in earnings per share. It is also backing 2013 sales growth of 15% to 20%, and adjusted earnings will come to $2.72 to $2,82 in earnings per share. Green Mountain’s prior target was $2.64 to $2.74 earnings per share. Thomson Reuters has estimates are $0.73 EPS for the second quarter and $2.71 EPS for this fiscal year ending in September. The cap-ex plan is going down to $350 million to $400 million from a prior range of $380 million to $430 million.

The 18% gain in Keurig sales dow not include customer returns. Other products and royalties declined 12% year-over-year primarily due to the demand shift from traditional coffee package formats to single serve packs. In the first quarter of fiscal year 2013, gross margin improved to 31.3% from 29.1% in the prior year period.

Wall St.’s reaction is that margin might not be not growing at the same rate as sales as K-Cup sales were slightly weaker than expected and that the sales projections are deemed weak. Green Mountain shares closed up 3% at $48.94 on the day ahead of earnings against a 52-week range of $17.11 to $71.15. Unfortunately, shares are down 10% at $43.80 in the after-hours reaction.

We would remind investors that Green Mountain often has a large short interest and that it is a battleground stock. Before the impact of earnings, the consensus price target was listed as only $47.73. Our take is that shares are just up so much from the bottom that shareholders are demanding more again. That being said, this battleground stock is still way down from its peak.

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