SodaStream Falls on Weak Top-Line Results

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SodaStream International Ltd. (NASDAQ: SODA) reported its third-quarter financial results before the markets opened on Wednesday. The company had $0.22 in earnings per share (EPS) on $110.0 million in revenue. That compared to Thomson Reuters consensus estimates of $0.21 in EPS on revenue of $111.74 million. In the same period of the previous year, the company posted EPS of $0.45 and $125.90 million in revenue.

On a constant currency basis, revenues totaled $126 million for the quarter.

Cash and cash equivalents at the end of September totaled $43.5 million, compared to $46.9 million at the end of December 2014. The decrease is primarily attributable to the investment in the company’s new production facility, partially offset by cash generated from operations.

In terms of its product segments, SodaStream recorded the following:

  • Sparkling Water Maker Starter Kits had $34.2 million in revenue, compared to $41.5 last year.
  • Consumables had $73.9 million in revenue, down from $81.2 million last year.
  • Other had $1.9 million in revenue, whereas it had $3.2 million in the previous year.

Daniel Birnbaum, CEO of SodaStream, commented on earnings:

Our operating results were similar to the year ago period on a constant currency basis as the growth plan we announced a year ago continues to gain traction. Our recent performance included a number of highlights that underscore the strength of our brand and business model. … Third quarter CO2 refills increased 10% to an all-time record 7 million, a great indication that our global user base is increasing consumption. We believe usage rates will continue to grow as existing and new consumers embrace our repositioning as a healthy “water brand” provided by our enhanced better-for-you product portfolio, which we recently launched in the U.S. and other select countries. As we accelerate production in our new, state-of-the-art plant in Lehavim, and continue the launch of our new Waters line and strategic repositioning, we believe we are poised to start delivering improved financial results and greater shareholder value beginning in 2016.

Shares of SodaStream were up 2.6% to $16.19 late Wednesday morning. The consensus analyst price target is $22.60, and the 52-week trading range is $11.40 to $24.38.

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