CORONA, Calif. (AP) — Monster Beverage Corp.'s second-quarter net income missed analyst expectations, as distribution costs rose and it continued to pay legal expenses because of questions about the safety of its beverages.
Net income fell almost 3 percent to $106.9 million, or 62 cents per share, in the three months ended June 30. That compared with $109.8 million, or 59 cents per share, last year. Per-share earnings rose because Monster had fewer shares in the most recent quarter.
Analysts had been expecting a profit of 64 cents per share, on average, according to FactSet.
Revenue rose 7 percent to $723.9 million, from $678.9 million. Once promotional allowances are accounted for, revenue was $630.9 million. Analysts were expecting revenue of $650 million.
Monster said it had higher costs of $5 million for professional services, most of it because of regulatory issues and litigation about Monster Energy drink ingredients and advertising.
"We reiterate that our energy drinks are safe, based on both our and the industry's long track record and the scientific evidence supporting the safety of our ingredients," said Rodney C. Sacks, chairman and CEO, in a statement.
Distribution costs also rose as it paid $2 million to switch some of its distributors. It also lost $3.6 million on currency fluctuations because of operations in Australia, Japan, and South Africa.
It said international sales of its Monster Energy brand drink are meeting its expectations.
Shares of Monster fell $3.22, or 5.1 percent, to $60.25 in after-hours trading. Before the results were released its shares gained $1.01 to close regular trading at $63.47, up about 20 percent for the year.