Monster’s board initiated the stock repurchase following weaker than expected third quarter revenues and profits. The company achieved $541.9 million in revenue for the quarter – a 14 percent jump in year over year sales – but fell well short of the $578.4 million that analysts projected. Monster earned $.47 per share in the quarter, disappointing Wall Street expectations for the company, which had slating earnings of $.55.
The stock repurchase program is likely an attempt to buffer Monster’s sagging share price which has has been significantly impacted by an investigation by the New York state attorney general’s office into its marketing practices as they relate to the caffeine content in its products, as well as a highly publicized lawsuit alleging that flagship energy drink contributed to the death of a Maryland teenager last December. In less than one month, Monster share price has slid from a high of $58.42 on Oct. 16 to $46.52 at press time today.
