May 7, 2008 / 9:24 PM / in 10 years

UPDATE 1-Hansen Q1 misses Street view; shares fall

(Recasts; adds details)

May 7 (Reuters) - Hansen Natural HANS.O, which makes Monster energy drink, reported lower-than-expected quarterly results as cost increases drove down profitability, sending its shares down 13 percent after the bell.

The company posted a first-quarter net income of $28.8 million, or 29 cents a share, compared with $20.2 million, or 21 cents a share, a year earlier.

Analysts on average expected the company to earn 35 cents a share, before special items, according to Reuters Estimates.

Net sales rose about 28 percent to $212.2 million but fell short of the Wall Street consensus of $220.7 million.

Hansen said it lost sales as customers made early purchases of the 16-ounce Monster Energy cans in the fourth quarter to beat price increases that were implemented this January.

Gross margins fell more than 2 percentage points to 49.4 percent, as sales of the Java Monster line, which has lower margins, increased, costs associated with launching the brand in the U.K. came in higher than expected and raw material prices rose.

Hansen, which competes mainly with privately held Austrian company Red Bull in the energy drinks market, has lost more than 56 percent of its market value since October 2007 over concerns of a potential slowdown in the company’s business.

Shares of the company fell $5.60 to $30.00 in trading after the bell -- lower than the shares’ 52-week low of $30.77 recorded on April 24 in regular trading on Nasdaq.The shares closed at $35.60 Wednesday. (Reporting by Vikram Subhedar in Bangalore; Editing by Himani Sarkar)

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