After the market closed today, Starbucks released its 3Q earnings and investors obviously aren't happy, sending the stock down 12% to $29.38 in pre-market trading as of 8:30 a.m..

Starbucks opened 559 stores in the quarter, 395 in the USA. The results were above estimates. So why is the market unhappy with the release? (See our Live Blog of the earnings call).

Starbucks EPS during the quarter was $0.18 (compared to $0.16 in the same period a year ago), and Wall Street was expecting $0.17 per share. (It should be noted that the one cent gain was actually because of a tax benefit, so without that Starbucks nailed estimates.) Several analysts believe it to be because of July's same-store sales, which were up 4%, but down 7% year-over-year.

Personally, I think the drop is overdone. Starbucks executives blamed the same-store sales drop on long lines (which I think is a good problem to have), and stronger demand for several non-espresso products (which they weren't at all expecting. Again, I think this is a good problem to have and one that is easy to deal with).

More barristas will be on hand during the morning peak hours to help settle everything out. This is the only "bad" thing that can be found in the report, or something bad enough to send the stock plummeting. It looks like we will see more overreaction today. Right now the stock market is expecting a lot from earning reports. It's to the point where if a company doesn't meet estimates and give good guidance, the stock will suffer in the short-term (3M's latest happenings is a good example.).

The interesting thing about this report and market overreaction is that Starbucks actually met estimates and held onto its previous guidance of 16 to 17 cents per share for the next quarter, and 71 to 72 cents per share for fiscal year 2006. This is why the analysts saying stock is going down because of the July sales is absolutely ridiculous. You would think people would look more ahead at all the opportunities that Starbucks is taking advantage of (more on this later), not a slight slip in one month of sales.

The opportunity I see that Starbucks is taking advantage of is the international market. Starbucks has started expanding into China, as we know, and plans to start expansion in Brazil in fiscal 2006. Next fiscal year it plans to start expanding into India and Russia. This means that by the end of next fiscal year, Starbucks will have exposure to the fastest growing economies in the world, otherwise known as "BRIC", or Brazil, Russia, India, and China.

That is very impressive, and shows what the potential is over the next 10 to 15 years with Starbucks. People can worry about one month of sales all they want, and the more they do that, the better the opportunity will be to get in at a great price. I'm poised to open my first position in Starbucks soon (depending on how volatile the stock is Thursday and Friday), and I think anyone with an understanding of the company and a long-term outlook should seriously look into Starbucks as an investment.