Red Mountain (NASDAQ: GMCR)

NEW YORK - Green Mountain Coffee plunged 40% in after hours trading today as the troubled company trumpeted out some pretty positive results but can the results be trusted, investors fretted. Net sales of $885.1 million, up 37% over net sales of $647.7 million in the year-ago quarter GAAP EPS of $0.58 compared to second quarter fiscal year 2011 GAAP EPS of $0.44 which is a rise of 32%.

 The company's accounting had been questioned by the SEC but even more-so after a presentation by Hedge Fund Manager David Einhorn who said the company's stock was priced for perfection and it had dubious accounting. Einhorn will likely be covering his shorts today as the stock is now trading at close to a 12 adjusted PE. However investors fret if that E is made up. The company said it expected a more moderate trajectory going forward. Fiscal year 2012 non-GAAP earnings per diluted share in a range of $2.40 to $2.50 per diluted share, excluding any acquisition-related transaction expenses; legal and accounting expenses related to the SEC inquiry and the Company’s pending litigation; amortization of identifiable intangibles related to the Company’s acquisitions; and any gain from the sale of the Filterfresh business. Investors are wondering how new competition will impact sales and earnings as their 1 serve coffee maker loses its patent.