Starbucks Corporation Shares Buck Lower On Q1 Revenues Miss

On Thursday January 25th, 2017, Starbucks Corporation reported quarterly earnings after the market closed. The earnings were stellar in the realm of performance. However, when you analyze them compared to what analysts have been expecting or what the whisper numbers were, then Starbucks slightly disappointed.

Subsequently, shares got blasted in the after market trading session as they fell precipitously. Let’s start by saying that the company reported $0.65 per share which beat the average analyst at $0.57 per share estimate. Revenues, which was the soft spot, came in at$6 billion dollars, which just missed estimates of 6.14 billion dollars.

This revenue figure grew by over 6% from the year prior. So as you can see, Wall Street is punishing companies that not only don’t meet expectations but even when they beat expectations the shares are vulnerable. The one silver lining is that the company does pay a hefty 1.95% dividend annually.

This alone is attractive for many longer-term investors so there should be some type of support for the share price even though the market will probably be lower for their shares in the morning.

Shares closed the regular trading session at $60.55 which was down $0.28 on the day. However in the aftermarket session shares dropped by 4.31% closing at $57.94.

Company Comments

Scott Maw, CFO had this to say after the earnings came out,

“Starbucks delivered solid revenue and profit growth and our first ever $6 billion revenue quarter in Q1. We are laser-focused on accelerating growth in China and driving improvement across the U.S.business as we move into and through the back half of the year, and remain committed to delivering on the long-term targets we announced last quarter.”

SBUX Technicals

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The above chart shows the regular trading session on the left, and the after hours session on the right. You can clearly see that when the earnings were announced shares dropped initially precipitously, then formed a sideways base and then dropped again.

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The chart above shows the daily price action going back a number of months. You can see how Starbucks had been in a decent up trend, but now it seems as though that uptrend will be penetrated as shares will  likely open in the red oval area in the far right corner.