Bloomberg News

Monster Beverage Falls as Profit Trails Estimates

November 08, 2012

Monster Beverage Corp. (MNST:US) tumbled to its lowest price in more than a year after posting third-quarter profit that trailed analysts’ estimates as sales growth slowed.

The shares slid (MNST:US) 11 percent to $40.11 at 9:34 a.m. in New York and earlier traded at $39.99, the lowest price since October 2011. The Corona, California-based company had fallen 2.4 percent this year through yesterday.

Third-quarter net income rose 4.6 percent to $86.1 million, or 47 cents a share, from $82.4 million, or 44 cents, a year earlier, the company said yesterday in a statement. The average estimate (MNST:US) of eight analysts surveyed by Bloomberg was 55 cents. Sales rose 14 percent to $541.9 million. Analysts’ estimated $578.4 million. Third-quarter revenue growth was the slowest since the fourth quarter of 2010.

Monster said slower sales for the industry as a whole led to “less robust” growth for the company’s namesake-branded energy drink in the U.S. during the period. Monster, which attracted scrutiny last month after its beverages were cited in the deaths of five people in the past year, yesterday said the U.S. Food and Drug Administration hasn’t established a “causal link” between the beverages and any fatalities.

“There is not a shred of information of which causally links Monster to these adverse events,” Chief Executive Officer Rodney Sacks said on a call with analysts after the results were released.

In September, Senators Richard Durbin of Illinois and Richard Blumenthal of Connecticut, both Democrats, wrote to the FDA urging clarity on whether energy drinks qualify as dietary supplements.

To contact the reporter on this story: Niamh Ring in New York at nring@bloomberg.net

To contact the editor responsible for this story: Kevin Orland at korland@bloomberg.net


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Companies Mentioned

  • MNST
    (Monster Beverage Corp)
    • $65.49 USD
    • 1.62
    • 2.47%
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