* Unnamed state attorney general issues subpoena
* Monster Energy ingredients, sales, ads being probed
* Shares fall after subpoena, Q2 results
Aug 9 Monster Beverage Corp on Thursday
said a state attorney general has begun investigating the
ingredients and advertising of its flagship, namesake energy
Monster said the probe is at an early stage, and that it did
not know whether it would lead to any action or materially hurt
its financial results or operations.
Shares of the Corona, California-based company, one of the
largest makers of energy drinks in the United States, dropped
4.8 percent in after-hours trading, extending a decline that
followed Wednesday's release of weaker-than-expected
In its quarterly report filed Thursday afternoon with the
U.S. Securities and Exchange Commission, Monster said it had
received a subpoena in July from an unspecified state attorney
general "in connection with an investigation concerning the
company's advertising, marketing, promotion, ingredients, usage
and sale of its Monster Energy brand of energy drinks."
Judy Lin Sfetcu, a company spokeswoman, declined to
On Wednesday, Monster said second-quarter profit rose 30
percent from a year earlier to $109.8 million, or 59 cents per
share, while revenue increased 28 percent to $592.6 million.
Analysts polled by Thomson Reuters I/B/E/S, however, on
average expected profit of 61 cents per share on revenue of
$596.1 million. Monster also said gross margins fell.
The company did not mention the subpoena in a conference
call with analysts late Wednesday discussing results, according
to a transcript provided by Thomson Reuters StreetEvents.
Major distributors of Monster drinks include Coca-Cola Co
and Anheuser-Busch InBev SA.
U.S. regulators have investigated other caffeinated drinks
in the past.
In 2010, Phusion Projects LLC agreed to remove caffeine and
other stimulants from its beverages, including the energy drink
Four Loko, after the U.S. Food and Drug Administration warned it
and some rivals that made so-called "blackout in a can" drinks
combining alcohol and caffeine, were unsafe.
Shares of Monster fell $2.94 to $58.26 in after-hours
trading on Thursday. They closed the regular trading session
down $6.57, or 9.7 percent, at $61.20.