Shares of Monster Beverage Corporation (MNST - Free Report) declined more than 6% in after-hours trading on Feb 28 after the company reported disappointing fourth-quarter 2017 results. It missed the Zacks Consensus Estimate on both counts.
Earnings & Revenue Discussion
Monster Beverage reported earnings of 35 cents per share, missing the Zacks Consensus Estimate of 37 cents. Earnings however increased from 30 cents a year ago.
Net sales of $810.4 million missed the Zacks Consensus Estimate of $842 million. The figure however improved 7.5% year over year. Foreign currency translation positively impacted net sales by $7.3 million, partially offset by 2% impact from inventory reductions by some of its international distributors.
Net sales to customers outside the United States increased 8.7% year over year to $210.4 million.
Quarterly Segment Details
Monster Energy Drinks: Net sales of the segment, which includes Monster Energy drinks, Monster Hydro energy drinks and Mutant Super Soda drinks, were up 7.6% year over year to $736.1 million.
Strategic Brands: This segment includes various energy-drink brands acquired from Coca-Cola (KO - Free Report) . Net sales at the segment rose 7.8% to $69.6 million in the quarter.
Other: Net sales at the segment, which includes some products of American Fruits & Flavors sold to independent third parties, were flat year over year at $4.7 million.
Inside the Headline Numbers
Fourth-quarter 2017 gross margin fell 400 basis points (bps) to 62.1% due to geographic sales mix since the company’s international operations have a lower profit margin.
Operating expenses, including $46.3 million in distributor termination expenses, decreased 4% year over year to $236.5 million. Operating income in the quarter was $267.1 million, up 6.1% year over year.
Selling expenses, as a percentage of net sales, were 13.6%, up 160 bps from the fourth-quarter 2016.
Effective tax rate in the quarter was 24.8% compared with 29.9% in the prior-year quarter.
2017 Highlights
Net sales came in at $3.4 billion, up 10.5% from 2016 level. Gross margin contracted 20 bps to 63.5%. Earnings increased to $1.42 per share from $1.19 a year ago.
Financials
Monster Beverage ended the quarter with cash and cash equivalent of $528.6 million, compared with $377.6 million as of Dec 31, 2016.
Zacks Rank & Peer Releases
Monster Beverage carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Coca-Cola Company’s comparable earnings in the fourth quarter of 2017 were 39 cents per share, surpassing the Zacks Consensus Estimate of 38 cents. The same improved from the year-ago quarter’s level of 37 cents, courtesy of ongoing productivity efforts.
PepsiCo (PEP - Free Report) reported fourth-quarter 2017 earnings per share of $1.31, beating the Zacks Consensus Estimate of $1.30 and increasing 9% year over year.
Dr Pepper Snapple Group’s fourth-quarter 2017 earnings were in line with the Zacks Consensus Estimate, while revenues lagged the same.
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Shares of Monster Beverage Corporation (MNST - Free Report) declined more than 6% in after-hours trading on Feb 28 after the company reported disappointing fourth-quarter 2017 results. It missed the Zacks Consensus Estimate on both counts.
Earnings & Revenue Discussion
Monster Beverage reported earnings of 35 cents per share, missing the Zacks Consensus Estimate of 37 cents. Earnings however increased from 30 cents a year ago.
Net sales of $810.4 million missed the Zacks Consensus Estimate of $842 million. The figure however improved 7.5% year over year. Foreign currency translation positively impacted net sales by $7.3 million, partially offset by 2% impact from inventory reductions by some of its international distributors.
Net sales to customers outside the United States increased 8.7% year over year to $210.4 million.
Quarterly Segment Details
Monster Energy Drinks: Net sales of the segment, which includes Monster Energy drinks, Monster Hydro energy drinks and Mutant Super Soda drinks, were up 7.6% year over year to $736.1 million.
Strategic Brands: This segment includes various energy-drink brands acquired from Coca-Cola (KO - Free Report) . Net sales at the segment rose 7.8% to $69.6 million in the quarter.
Other: Net sales at the segment, which includes some products of American Fruits & Flavors sold to independent third parties, were flat year over year at $4.7 million.
Inside the Headline Numbers
Fourth-quarter 2017 gross margin fell 400 basis points (bps) to 62.1% due to geographic sales mix since the company’s international operations have a lower profit margin.
Operating expenses, including $46.3 million in distributor termination expenses, decreased 4% year over year to $236.5 million. Operating income in the quarter was $267.1 million, up 6.1% year over year.
Selling expenses, as a percentage of net sales, were 13.6%, up 160 bps from the fourth-quarter 2016.
Effective tax rate in the quarter was 24.8% compared with 29.9% in the prior-year quarter.
2017 Highlights
Net sales came in at $3.4 billion, up 10.5% from 2016 level. Gross margin contracted 20 bps to 63.5%. Earnings increased to $1.42 per share from $1.19 a year ago.
Financials
Monster Beverage ended the quarter with cash and cash equivalent of $528.6 million, compared with $377.6 million as of Dec 31, 2016.
Zacks Rank & Peer Releases
Monster Beverage carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Coca-Cola Company’s comparable earnings in the fourth quarter of 2017 were 39 cents per share, surpassing the Zacks Consensus Estimate of 38 cents. The same improved from the year-ago quarter’s level of 37 cents, courtesy of ongoing productivity efforts.
PepsiCo (PEP - Free Report) reported fourth-quarter 2017 earnings per share of $1.31, beating the Zacks Consensus Estimate of $1.30 and increasing 9% year over year.
Dr Pepper Snapple Group’s fourth-quarter 2017 earnings were in line with the Zacks Consensus Estimate, while revenues lagged the same.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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