Monster Beverage falls in premarket as 1Q profit misses analysts' expectations

MarketsAssociated Press

Shares of Monster Beverage fell sharply Friday in premarket trading after the beverage company posted weak first-quarter profits.

Pressure came from higher operating expenses, which rose to $361.3 million from $138 million as distributor termination costs jumped.

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Coca-Cola last year said it would buy a 16.7 percent stake in Monster in an attempt to align the products that the companies sell, and also streamline their distribution systems.

The reshuffling has had some negative effects and late Thursday, the energy drink maker reported adjusted earnings of 62 cents per share, which was 6 cents below the projections on Wall Street, according to a poll by Zacks Investment Research.

Mark Astrachan of Stifel believes the partnership with Coke will contribute to double-digit sales growth and operating margin expansion through 2017. He maintained a "Buy" rating.

Monster Beverage Corp.'s stock dropped $7.02, or 4.9 percent, to $136.47 before the market opened.