Jessica Dye in New York
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Monster Beverage shares were sapped after the energy drink maker’s quarterly profit just missed Wall Street’s mark.
Shares of the California-based company dropped nearly 10 per cent in after-hours trading on Tuesday before clawing back some of that ground to trade almost 4 per cent lower at $51.00.
The move follows its results for the three months to the end of March, which showed a 14.7 per cent jump in net revenue to $850.9m. That was in line with the $850m that analysts surveyed by Factset had expected.
While its core Monster Energy drinks unit saw revenue grow 16.7 per cent from a year ago, its smaller strategic brands division — which includes energy drinks it bought from Coca-Cola, fell 3.3 per cent.
Net income, however, failed to meet expectations, despite rising 21 per cent from a year earlier to $216.1m, or 38 cents a share. That was dented by 1 cent due to charges in connection with terminating distributor agreements, the company said.
Analysts were looking for $225m in income, or 39 cents a share, according to Factset. Its gross profit also showed a squeeze on its margins, dropping to 60.6 per cent of net sales from 64.8 per cent last year, thanks in part to higher promotional costs, sales mix and other factors.
After rising 42.7 per cent last year, Monster shares are down 16.1 per cent so far this year as it fails to generate the sort of energetic growth that would grab Wall Street’s attention.
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