Monster Beverage Q1 Profit Tops View, But Sales Miss

(RTTNews) - Beverage company Monster Beverage Corp. (MNST) reported Thursday a profit for the first quarter that doubled from last year, reflecting improved operating margins and double-digit net sales growth. Earnings per share topped analysts' expectations, while net sales missed their estimates.

Monster Beverage develops and sells alternate beverage category drinks. Its products include carbonated energy drinks, non-carbonated dairy based coffee plus energy drinks, among others.

"We are pleased to report yet another quarter of continuing sales growth, in both our domestic and international markets," Chairman and CEO Rodney Sacks said in a statement.

Corona, California-based Monster Beverage reported net income of $95.25 million or $0.55 per share for the first quarter, higher than $63.50 million or $0.37 per share in the prior-year quarter.

On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the quarter. Analysts' estimates typically exclude special items.

The company noted that results continue to be negatively impacted by professional service costs related to regulatory matters and litigation concerning the advertising, marketing, promotion, ingredients, usage, safety and sale of Monster Energy brand energy drinks.

Net sales for the quarter increased 10.7 percent to $536.13 million from $484.22 million in the same quarter last year, but missed nine Wall Street analysts' consensus estimate of $542.33 million.

Net sales for the company's Direct Store Delivery segment increased 11.8 percent to $514.4 million from last year.

Gross sales increased 10.6 percent to $613.72 million from a year ago, with gross sales to customers outside the U.S. rising to $144.3 million from $130.7 million last year.

Operating margin expanded 560 basis points to 27.8 percent from last year as gross profit margin improved 140 basis points, and total operating expenses as a percentage of net sales decreased 420 basis points from a year ago.

"During the quarter, we successfully commenced production in Japan, which marks our 10th co-packing facility for Monster Energy® brand energy drinks outside the United States. We also are proceeding with our plans to introduce Monster Energy® brand energy drinks in additional international markets," Sacks added.

The company also launched two new Monster Energy brand energy drinks in the quarter, Punch Monster Baller's Blend as well as Punch Monster Mad Dog as replacements for our Dub Edition products.

MNST closed Thursday's regular trading session at $66.12, up $0.94 or 1.44% on a volume of 1.68 million shares. However, the stock lost $2.32 or 3.51% in after-hours trading.