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Shares of Sodastream (NASDAQ:SODA) are trading 20% lower on Tuesday after the company issued preliminary third-quarter results that came in below expectations.
Why it's happening
Sodastream's third-quarter revenue is now expected to reach $125 million. This is not only below the year-ago quarter's $144 million top line, it's also far beneath Wall Street's expectations for $154.4 million in revenue. Analysts had also expected $17.5 million in operating earnings, and Sodastream's anticipated $8.5 million is less than half that. Sodastream made no bones about its miserable performance -- CEO Daniel Birnbaum said that the company is "very disappointed in our recent performance," which was blamed on weak U.S. demand due to a lack of customer growth.
The company is in the middle of a strategic shift toward focusing more on health and wellness, and will share more details on this strategy during the third quarter's conference call later in the month.
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.