Sodastream International Ltd Tops Earnings, Misses Sales

Sodastream International Ltd (NASDAQ:SODA) released the earnings results for the third quarter before opening bell this morning, posting earnings per share of 45 cents on $125.9 million in revenue. Analysts had wanted to see earnings of 39 cents on $131.74 million in revenue.

In the same quarter last year, Sodastream reported $144.6 million in revenue and 76 cents per share in earnings. This year’s EBITDA was $15.7 million, compared to last year’s $21.9 million.

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Key metrics from Sodastream’s earnings report

Sodastream management said the company was pressured by “challenging selling conditions” for both soda makers and flavors, especially in the U.S. They noted strength in other markets, including Australia, Canada, Germany and Switzerland. Declines in distributor markets like the Czech Republic and France partially offset the strength in the other markets.

The company reported a gross margin of 51.2%, compared to 54.1% last year. Sodastream cited deleveraging of fixed costs on lower sales, a higher share of soda makers with lower margins and write-offs in inventory. A higher share of CO2 refills partially offset those issues.

Sodastream revises guidance

Along with this morning’s earnings report, Sodastream also offered an updated outlook for the full year. Management projects a 9% year over year decline in revenue, based on last year’s revenue of $562.7 million in revenue. They expect a 26% decline in full year EBITDA this year, based on last year’s EBITDA of $62.2 million. Sodastream also expects net income to fall by about 42% year over year, based on last year’s $42 million in net income.

Shares of Sodastream have been on a bumpy ride of late. The stock soared on Friday after it was reported that the company was planning a limited test on some of PepsiCo, Inc. (NYSE:PEP)’s most popular soda flavors. That increase came just weeks after Sodastream warned that it would disappoint in today’s earnings report. As a result, the company’s shares were probably not affected as badly as they would have been if management had not warned about the disappointment.