SodaStream Sells off on Soda Maker Unit Sales Weakness amid Record Quarter

Shares of home beverage carbonation systems company SodaStream International

are under much pressure after the company reported fourth quarter earnings results which beat analysts' estimates, however, soda maker sales were much weaker than expected. SodaStream reported fourth-quarter EPS of EUR 0.25 versus the estimated EUR 0.21 per share, beating by +19%. Revenues came in at EUR 66.1 million versus the estimated EUR 62.95 million, beating by +5%. However, soda maker unit sales only increased 8%, which was much less than analyst estimates. Total revenues for the fourth quarter of 2011 were Euro 66.1 million, $85.7 million as per a convenience translation*, an increase of 32.1% compared to Euro 50.0 million reported in the fourth quarter of 2010. Revenues for Western Europe and the Americas increased 20.5% and 70.2%, respectively, compared to the fourth quarter of 2010. During the fourth quarter of 2011, revenues of soda maker starter kits, which include a soda maker, a CO2 cylinder and a bottle, increased 24.4% to Euro 31.4 million and revenues of consumables increased 37.8% to Euro 32.6 million. On a unit basis, soda maker starter kits increased 7.7% to 767,000, CO2 refills increased 26.6% to 3.4 million, and flavors increased 24.2% to 4.6 million. Commenting on the quarter, Will Schmitz of Deutsche Bank stated, "[The] company remains in the early stages of a distribution expansion story with considerable room for further store expansion, increased household penetration off a low base, and margin expansion via fixed cost leverage and better profits per media dollar spent." "SodaStream continues to aggressively build out its retail footprint in the U.S. in an effort to drive increased household penetration of its machines," Schmitz continued. "However, machine units sold and sales were below our estimate this quarter which is a key question. Still, company is just beginning to expand with new retail partners." Currently, shares of SodaStream are down 13% at $41.29 per share.