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What's happening: Shares of Monster Beverage Corp. (NASDAQ:MNST) climbed more than 13% during Friday's trading after the energy drink specialist announced better than expected fourth-quarter results.
Why it's happening: Quarterly net sales climbed 12% year over year $605.6 million, which translated to a 64.7% increase in net income to $125.3 million. On a per-share basis, net income rose 63.2% to $0.72. Analysts, on average, were only expecting earnings of $0.59 per share on net sales of $584.1 million.
Monster CEO Rodney Sacks pointed out the company achieved continued revenue growth in both domestic and international markets. "In particular," noted Sacks, "we continued to achieve solid sales growth in Japan, which is becoming one of our largest international markets."
In addition, Monster Beverage reminded investors of its long-term agreement announced last August with Coca-Cola (NYSE: KO), under which Coca-Cola will acquire a roughly 16.7% ownership interest in Monster and will transfer ownership of its worldwide energy business to Monster. Monster, in turn, will transfer its non-energy business to Coca-Cola.
"Our Company will be bolstered by The Coca-Cola Company's energy brands in a number of geographies," Sacks elaborated, "providing us with complementary product offerings in many countries, access to new geographies, as well as access to new channels, including vending and specialty accounts."
For reference, Monster and Coca-Cola say they are working through "transitional issues" and now expect the transaction to close sometime in the second quarter of 2015.
Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola and Monster Beverage. The Motley Fool owns shares of Monster Beverage and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. 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.