Shares of Monster Beverage Corporation (MNST - Free Report) declined 5.18% in afterhours on Nov 3, as the energy drink company’s third-quarter numbers did not meet expectations.
Third Quarter Details
Monster Beverage’s third-quarter adjusted earnings of 99 cents per share missed the Zacks Consensus Estimate of $1.12 by 11.6%. Meanwhile, earnings increased 17.9% year over year on lower share count as a result of the completion of the modified Dutch auction in Jun 2016.
Net sales of $787.95 million missed the Zacks Consensus Estimate of $817.20 million by 3.6%. However, the figure improved 4.1% year over year.
Foreign currency had an unfavorable impact of $2.6 million on net sales. Net sales outside the U.S. rose 11.8% to $190.8 million on a year-over-year basis.
The effective tax rate in the third quarter was 33.8 %, compared with 39.4% a year ago. The decrease in the effective tax rate was due to a one-time tax benefit related to a prior period domestic production deduction.
As a result of the AFF transaction, the company achieved raw material cost savings of $23.3 million in the third quarter.
Monster Energy Drinks Segment: The segment reported net sales of $710.1 million, up 3.4% year over year.
Strategic Brands segment: This segment includes brands acquired from Coca-Cola. Net sales at the segment increased 3.2% to $72.1 million in the third quarter of 2016 compared with $69.9 million in the comparable quarter of 2015.
Other: Net sales for the company's Other segment, which includes certain products of American Fruits & Flavors sold to independent third parties, were $5.7 million in the quarter under review. Notably, the segment had reported no net sales in the prior-year quarter.
Third-quarter 2016 gross margin rose 230 basis points (bps) to 63.8%.
Operating income in the third quarter was $290.4 million, compared with $291.4 million in the prior-year quarter.
MONSTER BEVERAG Price, Consensus and EPS Surprise
Monster Beverage carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in this industry include Post Embotelladora Andina S.A. (AKO.B - Free Report) , Coca-Cola Amatil Limited (CCLAY - Free Report) and DAVIDsTEA Inc. (DTEA - Free Report) .
Embotelladora – a Zacks Rank #1 (Strong Buy) stock – is expected to witness a 6.47% decline in 2016 earnings. You can see the complete list of today’s Zacks #1 Rank stocks here.
Coca-Cola Amatil is likely to see a 10.81% rise in 2016 earnings. The company carries a Zacks Rank #2 (Buy).
DAVIDsTEA carries a Zanks Rank #2. Full-year 2017 earnings growth is projected at 29.03% for the company.
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