Starbucks Earnings Preview

Starbucks

is set to report its third quarter earnings on Thursday, July 26 after the market close. Analysts estimate that the company will announce earnings of $0.45 per share. Starbucks provides regular and decaffeinated coffee beverages, Italian espresso beverages, cold blended drinks, iced shaken beverages, teas, and packaged coffee. The company also offers some food products in its stores. Historically, Starbucks consistently beats earnings, and has not missed earnings estimates in the past twelve quarters. In the third quarter of 2011, the company had a positive surprise of $0.36 per share, or 6.5% higher than analyst estimates. In the second quarter of 2012, Starbucks reported earnings of $0.40 per share an increase of 18%, compared to a $0.39 estimate by analysts. The company results were record breaking for the second quarter. Starbucks also increased its full year outlook for 2012, increasing its full year earnings per share to a range of $1.81 to $1.84, an increase of 19% to 21%. Throughout the third quarter, Starbuck has expanded its business model and increased its presence in different countries. Throughout the third quarter, the company opened store in Finland and expanded its presence in Latin America. Starbucks also acquired the bakery La Boulange in order to expand the food selection in its stores. Competitors of Starbucks include Dunkin Brand Group

, McDonald's

, and Caribou Coffee

. Of these companies, McDonald's already reported earnings, missing estimates on a weak economy and currency. Dunkin Brand Group is also reporting earnings on Thursday. In the past month, analysts interviewed by Thomas Reuters have been bullish on Starbucks. Twelve analysts rated the company at a Strong Buy, eleven of them at a Buy, six at a Hold, and only one at an Underperform. The mean price target for Starbucks is $64.13. The company traded at $49.69 on Wednesday afternoon. Starbucks one-year earnings growth is 25%, compared to the industries average of 12%. The company also has a price to earnings ratio of 28.85, higher than the restaurant industry average price to earnings ratio of 21.40. This suggests that Starbucks is still a fast growing company. Starbucks traded down about 1% on Wednesday afternoon.