SodaStream (SODA) Beats On Q3 Earnings, Raises 2017 Outlook
Zacks Investment Research | Nov 01, 2017 09:12PM ET
SodaStream International Ltd. (NASDAQ:SODA) came up with impressive results in the third quarter of 2017, beating the Zacks Consensus Estimate on both counts. The company also raised its guidance for 2017. The company’s shares gained 4.8% during the trading session on Nov 1, to close at $66.71.
SodaStream’s adjusted earnings of 87 cents per share beat the Zacks Consensus Estimate of 84 cents by 3.6%. Earnings increased a robust 26.1% year over year driven by strong revenues, improved efficiencies, solid margin and lower tax rates.
Revenues
Total revenues of $139.8 million beat the Zacks Consensus Estimate of $135 million by 3.5%. Sales rose 12.5% year over year.
The impressive top-line result was driven by a double-digit increase in revenues across all the regions, baring the Americas (up 1.2%). The performance was particularly solid in Germany, Japan, Canada, Austria and Australia.
Sales rose 13.5% in Western Europe, which represented 61% of its global sales, owing to double-digit growth in Germany. Additionally, meaningful gains in Austria and Benelux also added to the positives. Notably, machine and gas refill unit sales increased in high single digits or more in each of these markets.
SodaStream’s revenues from the Americas increased 1.2%. The sales momentum has slowed to some extent in Canada following robust first half of 2017. Sales increased in strong double-digits driven by more than 30% growth in machine, gas refill and flavor unit sales.
In the Asia Pacific, revenues increased 34% year over year due to strong demand in Australia and Japan. In Central & Eastern Europe, Middle East, Africa (CCEMA) sales surged 10.6%, primarily on higher sales growth in Israel.
Margins Improve
Gross margin rose 170 basis points (bps) year over year to 53.5%. Adjusted EBITDA was $23.3 million, up 30.5% year over year. Continued production optimization, higher production volume, introduction of higher margin sparkling water makers and changes in Fx compared to the same period in 2016, led to the upside.
Operating income was $23 million, increasing 24% year over year, driven by higher operating leverage and gross margin improvement.
2017 Outlook Raised
Total revenues for 2017 are expected to witness 13% year-over-year increase to $536 million, better than the prior expectation of $523 million. Meanwhile, fourth-quarter revenues are expected to increase approximately 14% to about $150 million.
The company has maintained its gross margin guidance that is expected to increase by 150 bps to approximately 53%.
EBITDA of 2017 is now expected to be approximately $98 million, up 30% from $76 million in 2016.
Operating income is likely to grow approximately 40% to about $76 million. Earlier, it was expected to increase 30%.
Get The News You Want
Earnings per share is now expected to increase 40% to $2.90, up from the prior expectation of $2.70.
Zacks Rank
SodaStream currently carries a Zacks Rank #3 (Hold). You can see Original post
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