Why Sodastream International Ltd's Shares Went Flat Today

By Markets Fool.com

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

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What's happening?
Shares of Sodastream were trading roughly 7% lower around 1 p.m. today after initially plunging to a loss of 11% after the opening bell. Investors were not happy about SodaStream's fourth-quarter results, which managed to pull a solid bottom line(after adjustments) out of underwhelming sales.

Why it's happening
Sodastream's fourth quarter saw the in-home carbonated-beverage maker produce adjusted earnings of $0.35 per share on $126.5 million in revenue. Analysts had expectedthe company to report $127.1 million in revenue and $0.18 in adjusted EPS, so the report does appear to be positive at first glance. However, while Sodastream's bottom line beat the year-ago quarter's $0.03 result, its revenue fell well below last year's $168.1 million result. Full-year results were also well below 2013's numbers on both top and bottom lines, as Sodastream reported$511.8 million in revenue for 2014 against $562.7 million in 2013 revenue, and $1.31 in full-year adjusted EPS against 2013's result of $1.96.

Sodastream saw growth only in the Asia-Pacific region during the fourth quarter. The minimal 11% sales uptick in this region could not offset a devastating 49% drop in sales to the Americas, which was Sodastream's top-grossing geography a year ago but is now a distant second behind Western Europe. The company reported declining revenue for all three of its major product categories for the quarter, with its starter kit machines resulting in 32% less revenue in 2014 than they had a year earlier. A 17% rise in CO2 refill cartridge unit sales also failed to offset a 38% plunge in flavor pack sales.

Investors may also be unhappy with the fact that Sodastream's fourth-quarter adjusted profit was only achieved by backing out large restructuring charges -- under the International Financial Reporting Standards, Sodastream reported a net loss of $0.39 per share.

The article Why Sodastream International Ltd's Shares Went Flat Today originally appeared on Fool.com.

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Alex Planes has no position in any stocks mentioned. The Motley Fool recommends SodaStream. The Motley Fool owns shares of SodaStream. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.