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Why Monster Beverage Shares Jumped 13% This Morning

Anders Bylund, The Motley Fool

What happened

Shares of energy drink giant Monster Beverage (NASDAQ: MNST) popped as much as 13% higher on Thursday, following the company's solid fourth-quarter earnings report. As of 12:45 p.m. EST, the stock had settled down to a 10.5% gain.

So what

Monster's fourth-quarter sales rose 14% year over year, landing at $924 million. On the bottom line, earnings increased by 23% to $0.43 per diluted share. Your average analyst would have settled for earnings near $0.40 per share on revenue in the neighborhood of $899 million.

A can of Monster Energy resting on a bed of ice cubes.

Image source: Author.

Now what

The company achieved these impressive results despite a few top-line headwinds. New accounting practices reduced Monster's total sales by $8.5 million, while foreign exchange effects took $14.4 million out of its net sales. Meanwhile, the price increases Monster announced in the third quarter caused customers to make large pre-orders before the new prices took effect in the fourth quarter. This event moved as much as $16 million of sales out of the fourth quarter and into the third. Posting 14% sales growth in comparison to a year-ago period that did not face these challenges is a dazzling feat, and a strong testament to Monster's market position in a thriving energy drink sector. It's no surprise to see investors bidding up Monster shares today.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Monster Beverage. The Motley Fool has a disclosure policy.