Monster Beverage shares slip as sales beat but margins miss in third quarter

what happened

According to stockstory.org, shares of energy drink maker Monster Beverage fell 2.7% in the afternoon session after it reported third-quarter results. Revenue reached $2.56 billion, up 16.7% year on year and above the $2.48 billion estimate from S&P analysts.

Adjusted earnings came in at 30 cents a share, in line with forecasts. Adjusted operating income was $748.1 million against estimates of $742.5 million. However, gross margin fell to 54.7% from 55.7% a year earlier and missed expectations, while the operating margin dropped to 28% from 30.7%.

The stock was trading at $46.18, down 3% from the previous close.

why it matters

Strong sales growth did not offset the margin squeeze, and investors read that as a negative signal. According to the same source, the stock has moved more than 5% only twice over the past year, so the decline is notable but unlikely to change the view of the business. The shares trade close to their 52-week high of $49.97.

market impact

Monster shares: sales growth did not offset margin pressure, weighing on the stock

• ▼Monster Beverage shares pressure down — the squeeze in gross and operating margins outweighs revenue growth

tags

instruments