Monster Beverage Q2 Profit Slips, Misses Street; Shares Down

(RTTNews) - Monster Beverage Corp. (MNST) Thursday reported a three percent drop in second-quarter profit, hurt mainly by higher expenses that offset growth in revenues. Shares of the energy drinks maker fell five percent in extended trade after its earnings and revenues for the period fell short of Wall Street expectations.

Corona, California-based Monster Beverage's second-quarter profit dropped to $106.9 million from $109.8 million last year.

On a per-share basis, earnings improved to $0.62 from $0.59 last year, due to lower number of shares outstanding. On average, nine analysts polled by Thomson Reuters expected the company to earn $0.64 per share for the quarter. Analysts' estimates typically exclude special items.

A stronger dollar, legal costs related to regulatory matters and litigation concerning the safety of its energy drinks impacted the company's bottom line.

Monster Beverage's net sales grew 6.5 percent to $630.93 million from $592.64 million a year ago. Analysts expected revenues of $646.14 million for the quarter.

Commenting on the results, Chief Executive Rodney Sacks said, "We are pleased to report another quarter of solid sales growth, in both our domestic and international markets, but note that there were certain exceptional costs that affected profitability during the quarter."

Gross margin, or percentage of sales left after deducting production costs, improved to 53.3 percent from 51.8 percent. However, operating costs rose to $156.8 million from $137.2 million from a year ago. Operating margin dropped to 28.4 percent from 28.6 percent last year.

The effective tax rate for the second quarter increased to 39.3 percent from 35.3 percent last year.

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.

MNST closed Thursday at $63.47, up $1.01 or 1.62%, on the Nasdaq. The stock, however, dropped $2.92 or 4.60% in after-hours trade.