* Third-quarter earnings/share $0.47 vs estimates $0.55
* Shares down 12 percent after market
Nov 7 Monster Beverage Corp reported a
third-quarter profit below Wall Street expectations, hurt by
higher promotional offers that weighed on margins.
Shares of the energy drink maker fell 12 percent in extended
trading. They closed at $44.97 on the Nasdaq on Wednesday.
Gross margin for the quarter ended Sept. 30 fell to 50.5
percent from 52.7 percent a year earlier.
Promotional offers, which mainly include discounts given to
its distributors or retail customers, rose 23 percent.
Energy drinks have come under review in recent times due to
health concerns surrounding some ingredients, such as the
amount of caffeine used in the products.
The U.S. Food and Drug administration said last month it was
investigating reports of five deaths that may be related to
Monster Beverage's namesake drinks.
The company, which also sells drinks such as Java Monster
and X-Press Monster, did not comment on the investigation in its
Sales of energy drinks form the fastest growing segment of
the soft drinks market. Sales rose 17 percent to $9 billion in
2011 and are expected to exceed $10 billion this year, according
to Beverage Digest.
Monster's net income for the quarter rose to $86.1 million,
or 47 cents per share, from $82.4 million or 44 cents per share,
a year earlier.
Analysts on average had expected earnings of 55 cents per
share, according to Thomson Reuters I/B/E/S.
Net sales increased 14.2 percent to $541.9 million.