Monster Beverage Corp. (NASDAQ:MNST) will release results for its first quarter ended March 31, 2014 on Thursday, May 8, 2014 after the close of the market. The company also said that chairman and chief executive officer Rodney Sacks and vice chairman and president Hilton Schlosberg will host an investor conference call that same day at 2:00 p.m. Pacific Time to review the company's financial results and operations.
Wall Street anticipates that the energy drink maker will earn $0.49 per share for the quarter, which is $0.12 more than last year's profit of $0.37 per share. iStock expects Monster Beverage to miss Wall Street's consensus number. The iEstimate is $0.47, two cents less than expected.
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Sales, like earnings, are expected to increase, moving higher by 12% year-over-year (YoY). MNST's consensus revenue estimate for Q1 is $542.33 million, more than last year's $484.22 million.
Monster Beverage Corporation is a holding company. The Company develops, markets, sells and distributes alternative beverage, such as non-carbonated ready-to-drink iced teas, lemonades, juice cocktails, single-serve juices and fruit beverages, ready-to-drink dairy and coffee drinks, energy drinks, sports drinks, and single-serve still water (flavored and unflavored) with beverages, including sodas that are considered natural, sparkling juices and flavored sparkling beverages.
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The drink maker has been anything but a Monster during earnings time. Management delivered six straight bearish surprises, missing by as little as $0.02 and as much as a dime. On average, EPS were almost a nickel less than investors expected during the bearish streak.
As you might imagine, Wall Street's reaction to negative earnings surprises was, well, negative. Shares backpedalled in the days surrounding four consecutive and five of the last six quarterly checkups – not what shareholders want to see.
The red reactions ranged from -1.30 to -20.20% - ouch – while averaging a loss of -6.42%. Toss out the 20% move and the average loss drops to a less painful 2.98%.
One might wonder why the company keeps falls short of consensus expectations. One of the big reasons could be that operating expenses are rising a lot faster than sales. In 2013, the top line increased by 9% while operating expenses climbed 16.5%. as a percentage of sales, the line item grew to 26.7% or revenue last year versus 24.99% in 2012.
While that might not sound like much, the difference was $38.6 million less in profit for 2013, which works out $0.23 per share. That money is the difference between bullish and bearish surprises and will continue to be so until management gets operating expenses under control.
Another concern heading into Thursday's announcement is that interest in energy drinks appears to be waning. Google searches for "Monster Energy" and "Energy Drink" are steadily declining. It may not show up today, but it's possible that all the negative press eventually could have an impact on sales.
Overall: operating expenses are the key to Monster Beverage Corp.'s (NASDAQ:MNST) bottom line meeting, beating, or missing expectations. As it is, the iEstimate and the MNST's recent history suggest it won't be corrected in Q1.
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