Can Monster Keep This Pace Up With Earnings?

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Monster Beverage Corp. (NASDAQ: MNST) released its most recent earnings report after markets closed on Wednesday. The company posted $0.30 in earnings per share (EPS) and $753.77 million in revenue, compared with the consensus estimates from Thomson Reuters that called for $0.30 in EPS and $721.17 million in revenue. The fourth-quarter from last year had $0.23 in EPS and $645.43 million in revenue.

The company reported continued progress on its strategic alignment using Coca-Cola Co. (NYSE: KO) as a distribution system, both domestically and internationally. In the U.S., Monster saw improvements in the quality of its distribution, particularly in the food service channel, and it transitioned distribution of Monster Energy drinks to the Coca-Cola bottlers in Wisconsin early in January 2017.

Internationally, the company transitioned distribution of Monster Energy drinks to the Coca-Cola bottlers in Brazil, Costa Rica and Panama, and a few other countries during the fourth quarter.

In terms of its segments the company reported:

  • Monster Energy Drinks saw sales increase 17% to $684.4 million.
  • Strategic Brands increased 6.9% to $64.5 million.

Board of directors authorized a new repurchase program for the repurchase of up to $500 million of the Company’s outstanding common stock.

On the books, cash, cash equivalents, and short-term investments totaled $598.1 million at the end of the quarter, versus $2.92 billion in the same period from last year.

Rodney C. Sacks, Chairman and CEO, commented:

In China, we continued with launches in Shanghai, Hunan Province, Shenzhen, Guangzhou, Zhanjiang and Hainan in the quarter.  Further launches are planned throughout 2017 in China.  We also launched Monster Energy drinks in Nigeria early in 2017 and are planning further launches of Monster Energy drinks in other countries in 2017, including a relaunch in India. We launched Mutant, our new Super Soda drinks, in certain convenience store chains in late September 2016 and continue to see encouraging early results.  We are planning for additional distribution of Mutant in 2017. Our 2016 fourth quarter results were impacted by distributor terminations and the strength of the United States dollar.

Shares of Monster closed Wednesday at $42.01, with a consensus analyst price target of $53.53 and a 52-week trading range of $40.30 to $55.50. Following the release of the earnings report, the stock was up 7% at $44.99 in the after-hours trading session.

Shares of Coca-Cola closed Wednesday up 0.5% at $42.16, with a consensus analyst price target of $43.45 and a 52-week trading range of $39.88 to $47.13.