Monster Beverage’s (NASDAQ:MNST) Sales Drop Does Not Stop 1.4% Rise


Dallas, Texas 08/11/2014 (FINANCIALSTRENDS) – Monster Beverage’s (NASDAQ:MNST) the makers of popular soft-drink brand, has reported sales which are markedly below expected by analysts. MNST soft-drinks which offers non-aerated drinks, announced second quarterly results, showed a slowdown in sales. However the mixed performance did not deter the stock prices from rising by 1.4% on the stock market, closing the trading session on Friday at $66.

Earnings On Cue Despite Sales Let Up

For MNST the second quarter results indicated earnings in the range of $0.81 per share. This was about $0.06 more than prices expected by analysts. But, on the revenue front, the growth was in the region of 8.9%. Much of this growth was driven by the 12% increase in revenue in international market segments, while the US market grew by 6%.

The financial report for the second quarter for MNST reveals that, the wider margins drove the recent earnings. This was amply supported by drop in marketing expenses as well as a strategic move to local production, especially in international markets. As MNST chose to stimulate local economies, the upside was lowered production costs, leading to wider margin gains.

Analysts Predict Sustained Growth In H2

Analysts covering Monster Beverage’s (NASDAQ:MNST), reported that the second half augurs good, despite non-positive industry turnaround. Analysts at Jefferies’ led by Kevin Grundy, post Buy rating with the target price fixed at $80. Though, not all of the industry players in the soft-drinks industry are expected to do better in the current market conditions, analysts expect Monster to overcome challenges and emerge with sustainable margins in the coming quarters as well.

Other analysts, such as Wendy Nicholson, from Citi reiterated Neutral rating as the challenges would trouble Monster Beverage’s (NASDAQ:MNST) in the coming quarters. Nicholson’s note on Friday read, “We think it’s reasonable for investors to expect U.S. sales growth of 5 percent to 8 percent.”

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