On Tuesday, Jamba (NASDAQ: JMBA ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Many businesses get most of their business during the fall and winter months, but for smoothie specialist Jamba, its cold beverages are a tough sell during the frigid part of the year. Let's take an early look at what's been happening with Jamba over the past quarter and what we're likely to see in its quarterly report.
Stats on Jamba
| Analyst EPS Estimate | ($0.02) |
| Year-Ago EPS | ($0.03) |
| Revenue Estimate | $54.1 million |
| Change From Year-Ago Revenue | 2% |
| Earnings Beats in Past 4 Quarters | 2 |
Source: Yahoo! Finance.
Did Jamba hibernate or grow this quarter?
Analysts have gotten more optimistic about Jamba's earnings prospects in recent months, having slashed their initial loss estimates for the just-ended quarter in half and boosted their consensus for future full-year 2014 earnings by $0.02 per share. The stock has responded in kind with a 6% jump since late January.
Much of the good news for Jamba during the first quarter came when it made its earnings announcement for the previous quarter in early March. Posting its first annual profit since going public eight years ago, Jamba confirmed its previous guidance for 2013, encouraging shareholders looking for further growth from the company.
How Jamba will grow involves a combination of strategies. The company still plans between 60 and 80 new traditional locations this year, but Jamba is also pushing hard on its JambaGO stations, which are small self-service machines targeted largely at school cafeterias. Jamba expects 1,000 new JambaGO locations this year, which would more than triple its count of just over 400 as of the end of 2012.
Internationally, Jamba still has a small presence, but it made a big step by making a master franchise development agreement to open 80 stores throughout Mexico beginning later this year. The success that Arcos Dorados (NYSE: ARCO ) has had in Mexico and other Latin American countries in franchising McDonald's (NYSE: MCD ) locations shows the huge potential that the region has generally for American restaurants, and focusing on warmer climates should help Jamba avoid the seasonality it suffers colder markets like the U.S. and Canada.
In Jamba's report, watch to see if the company's new store format is inspiring more sales of fresh juice and other beverages that are more in line with what Starbucks (NASDAQ: SBUX ) focused on in buying juice-specialist Evolution Fresh. If it does, then the potential for a Jamba-Starbucks merger could rise considerably -- and the greater product diversification will make Jamba look much more attractive as an independent company as well.
McDonald's has also been named as a potential buyer for Jamba, but the fast-food Goliath has had its own problems lately. In our premium report on McDonald's, our top analyst weighs in on whether the future is bright for McDonald's. To find out whether a buying opportunity has emerged for the global juggernaut, click here now to get your report today.
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