Shares of Monster Beverage Corp. (MNST) plunged more than 12 percent in extended trade on Wednesday after the beverage company reported results for the first quarter that missed analysts' expectations.
The company also reported a profit for the quarter that declined 17 percent from last year, reflecting significantly lower margins amid higher operating expenses, despite a revenue 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.
"While we are pleased to report another quarter of sales growth, there were a number of exceptional costs that affected profitability in the quarter. Despite the single digit category growth rates we are seeing, the Monster Energy® brand continued to grow in excess of category growth, both in North America and Europe," Chairman and CEO Rodney Sacks said in a statement.
Corona, California-based Monster Beverage reported net income of $64.0 million or $0.37 per share for the first quarter, lower than $76.10 million or $0.41 per share in the prior-year quarter.
On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.46 per share for the quarter. Analysts' estimates typically exclude special items.
The company noted that results were negatively impacted by distributor termination obligations, foreign currency transaction losses and legal and other costs related to regulatory matters and litigation concerning Monster Energy brand energy drinks.
On Monday, San Francisco City Attorney Dennis Herrera filed a lawsuit against Monster Beverage, accusing the nation's largest energy drink maker of violating California law with its marketing of its highly-caffeinated energy drinks to children despite grave health dangers.
Revenues for the quarter increased 6.5 percent to $484.22 million from $454.60 million in the same quarter last year, but missed seven Wall Street analysts' consensus estimate of $501.74 million.
Net sales for the company's Direct Store Delivery segment increased 6.7 percent to $460.2 million from last year.
Gross Sales increased 7.3 percent to $554.95million from a year ago, with gross sales to customers outside the U.S. rising to $130.7 million from $100.6 million last year.
Operating income as a percentage of net sales contract 560 basis points to 22.2 percent from last year as gross profit margin as a percentage of net sales declined 100 basis points, while total operating expenses as a percentage of net sales increased 460 basis points from a year ago.
"Monster Energy Zero Ultra, launched in the third quarter of 2012, has gained considerable traction, and has become our second best-selling product. We are continuing to plan launches in new international markets," Sacks added.
MNST closed Wednesday's regular trading session at $56.97, down $0.18 or 0.31% on a volume of 3.63 million shares. The stock plunged a further $7.07 or 12.41% in after-hours trading.
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