Sodastream International Ltd (SODA) Sparkles With 141% Earnings Jump

The strategy of de-emphasizing SODA and pushing the 'Sparkling Water Maker' image seems to be working.

Sodastream International Ltd (NASDAQ:SODA) delivered a refreshing treat to SODA stock holders today, beating estimates and showing its chops in the battle with big sugary beverage makers. However, despite the beat, SODA shares are down more than 10% this morning in early trading.

Revenue in the quarter grew 14.3% to $115.3 million compared to $100.9 million in Q1 2016, the company said. EBITDA increased 62.9% to $2 million compared $12.3 million in the comparable period. Net income was up 141.8% to $14.7 million (66 cents) versus $6.1 million.

Analysts had forecast sales to reach $109.8 million in the quarter, with earnings per share of 38 cents, according to Zacks Investment Research. SODA said sale of its gas refill units increased 12% year-over-year, the strongest quarterly gain in several years.

Headquartered outside of Tel Aviv, Israel, Sodastream manufactures home beverage carbonation systems. Last year, SODA tweaked its marketing strategy — and the name of its flagship product to a “Sparkling Water Maker”, de-emphasizing soda —  in an attempt to combine its existing user base with new, healthy and/or eco-friendly consumers.

“Our first quarter performance represents a very good start to 2017,” said CEO Daniel Birnbaum. “Sales grew double digits in each of our four geographic regions as investments in marketing fueled strong demand for sparkling water makers.”

SODA provides an alternative to beverage customers of PepsiCo, Inc. (NYSE:PEP), The Coca-Cola Co (NYSE:KO), Dr Pepper Snapple Group Inc. (NYSE:DPS) and Monster Beverage Corporation (NASDAQ:MNST). Those producers have faced an onslaught from local authorities in the U.S. who are seeking to curb the consumption of sugary drinks. In March, Pepsi said it would stop selling certain sizes of soda in Philadelphia due to its tax on the drinks.

SODA stock has nearly tripled in price since falling to a record low in January 2016, gaining 26% in the last three months alone. PEP has eked out slightly more than 2% in the same period, while KO added 7%.

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