Monster Beverage Surge 8% As Q4 Results Top Estimates

(RTTNews) - Shares of Monster Beverage Corp. (MNST) surged more than eight percent in extended trading on Thursday after the beverage company reported results for the fourth quarter that topped analysts' expectations. The company also reported a profit for the quarter that surged 65 percent from last year, reflecting improved operating margins and double-digit net sales growth.

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 another quarter and year of continuing sales growth, in both our domestic and international markets. In particular, we continued to achieve solid sales growth in Japan, which is becoming one of our largest international markets. In particular, we continued to achieve solid sales growth in Japan, which is becoming one of our largest international markets," Chairman and CEO Rodney Sacks said in a statement.

Corona, California-based Monster Beverage reported net income of $125.33 million or $0.72 per share for the fourth quarter, higher than $76.11 million or $0.44 per share in the prior-year quarter.

On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.59 per share for the quarter. Analysts' estimates typically exclude special items.

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

Net sales for the quarter increased 12.0 percent to $605.6 million from $540.85 million in the same quarter last year, and topped fifteen Wall Street analysts' consensus estimate of $584.46 million.

Net sales for the company's Direct Store Delivery segment increased 12.6 percent to $584.8 million from last year.

Gross sales increased to $696.29 million from $621.07 million a year ago, with gross sales to customers outside the U.S. rising to $160.1 million from $137.9 million last year.

Operating margin expanded 700 basis points to 31.9 percent from last year as gross profit margin improved 360 basis points, and total operating expenses as a percentage of net sales improved 340 basis points from a year ago.

"Our Company will be bolstered by The Coca-Cola Company's energy brands in a number of geographies, providing us with complementary product offerings in many countries, access to new geographies, as well as access to new channels, including vending and specialty accounts," Sacks added.

Coca-Cola in August agreed to acquire about 16.7 percent ownership interest in Monster and will have two directors on Monster's Board. At the closing, Coca-Cola Company will make a net cash payment of $2.15 billion and transfer its worldwide energy business to Monster.

In exchange, Monster will issue to The Coca-Cola Company the shares of Monster common stock, transfer its non-energy business to The Coca-Cola Company, and enter into expanded distribution arrangements. The transaction is expected to close during the second quarter of 2015.

MNST closed Thursday's regular trading session at $124.74, up $0.95 or 0.77% on a volume of 2.14 million shares. The stock soared a further $10.03 or 8.04% in after-hours trading.