How Monster Crushed Earnings

Companies and Brands

Published: April 29, 2016 10:36 am

Last Updated: January 13, 2020 10:06 am

Monster Beverage Corp. (NASDAQ: MNST) released its first-quarter financial results before the markets opened on Friday. The company said it had $0.80 in earnings per share (EPS) on $680.19 million in revenue, versus Thomson Reuters consensus estimates of $0.74 in EPS on $656.81 million in revenue. In the same period of last year, the company posted EPS of $0.64 and $626.79 million in revenue.

For the sake of comparison, and in connection with the long-term strategic partnership entered into with Coca-Cola Co. (NYSE: KO), the comparable 2015 first-quarter financial results included distributor termination costs of $206.0 million, $39.8 million of acceleration of deferred revenue as a result of distributor terminations and transaction related expenses of $3.6 million.

Monster Beverage intends to commence a tender offer in May to purchase up to $2.0 billion in value of its common stock through a modified “Dutch auction” at a price range yet to be determined. Monster will fund the tender offer with cash on hand.

On the books, cash, cash equivalents and marketable securities totaled $3.04 billion at the end of the quarter, compared to $2.92 billion at the end of 2015.

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Rodney C. Sacks, chairman and CEO of Monster, commented:

Additionally, we are pleased to note continued progress on the implementation of our strategic alignment with Coca-Cola bottlers internationally. In particular, we have concluded agreements with Coca-Cola Amatil and will be launching our Monster Energy drinks in Australia and New Zealand in May 2016 with Coca-Cola Amatil. We are also pleased to report that we have reached agreements with a number of other international Coca-Cola bottlers for distribution of our Monster Energy drinks. In the United States, the Coca-Cola bottlers have expanded the number of outlets in which Monster Energy drinks are available, and we are seeing improvements in our levels of distribution.

Shares of Monster traded up 12% to $143.28 Friday morning, with a consensus analyst price target of $154.94 and a 52-week trading range of $113.08 to $160.50.

Coca-Cola was trading at $44.81, up 0.4%. The consensus price target is $47.91, and the 52-week range is $36.56 to $47.13.

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