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Monster Beverage (MNST) Shares Gain on Q4 Earnings Beat

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Shares of Monster Beverage Corporation (MNST - Free Report) rallied more than 14% in afterhours trading on Mar 1, as the energy drink company’s fourth-quarter numbers exceeded expectations even after facing $46.3 million in distribution termination fees.

Monster Beverage’s fourth-quarter adjusted earnings of 35 cents per share beat the Zacks Consensus Estimate of 30 cents by 16.7%. Earnings also increased 59.1% year over year on higher sales.

Full-year 2016 earnings came in at $1.19, up from the year-ago profit level of 95 cents per share. The reported figure, however, missed the Zacks Consensus Estimate of $1.23.

Sales Detail

Net sales of $753.8 million surpassed the Zacks Consensus Estimate of $724 million by 4.1%. The figure improved 16.8% year over year.

Full-year 2016 net sales were $3 billion, which missed the analysts’ expectation of $3.02 billion. However, the reported figure grew 12% year over year.

Foreign currency had an unfavorable impact of $3.3 million on quarterly net sales and $22.3 million on 2016 net sales.

Net sales outside the U.S. rose 33.2% to $193.5 million in the quarter on a year-over-year basis.

Quarterly Segment Details

Monster Energy Drinks Segment: Net sales at the segment, comprising Monster Energy drinks as well as Mutant Super Soda drinks, were $684.4 million, up 17% year over year.

Strategic Brands segment: This segment includes brands acquired from Coca-Cola. Net sales at the segment increased 6.9% to $64.5 million in the fourth quarter of 2016, compared with $60.4 million in the comparable quarter of 2015.

Other: Net sales for the company's Other segment, which includes some products of American Fruits & Flavors sold to independent third parties, were $4.7 million in the quarter under review. Notably, the segment had reported no net sales in the prior-year quarter.

Margins

Fourth-quarter 2016 gross margin rose 360 basis points (bps) to 66.1%. Operating expenses rose 40.9% year over year to $246.4 million. Operating income in the quarter was $251.7 million, compared with $228.4 million in the prior-year quarter.

Financials

Monster Beverage ended the quarter with cash and cash equivalent of $377.6 million as of Dec 31, 2016, compared with $2.17 billion as of Dec 31, 2015.

Monster Beverage carries a Zacks Rank #4 (Sell).

Monster Beverage Corporation Price, Consensus and EPS Surprise

 

Monster Beverage Corporation Price, Consensus and EPS Surprise | Monster Beverage Corporation Quote

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 Primo Water Corporation (PRMW - Free Report) , all with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Embotelladora is expected to witness 18.5% earnings growth in the fourth quarter of 2016.

Coca-Cola Amatil is likely to see a 10.8% rise in 2016 earnings.

Primo Water has a solid earnings surprise history, having an average positive surprise of 170%.

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