Investors Pop SodaStream's Q1 Bubble, But Shares Rebound

SodaStream International Ltd. SODA on Wednesday reported first quarter results for the three-month period ending March 31, 2014.

Daniel Birnbaum, CEO of SodaStream commented, “Our first quarter results were generally in-line with our expectations and reflect strong growth outside the U.S. offset by the negative impact on soda maker sell-in in the U.S. from the challenging holiday season. Our global base of SodaStream users inclusive of the U.S. remains very active evidenced by strong consumable sales growth, giving us added conviction in the attractiveness of our home carbonation system.

"We are in the process of adjusting our marketing and selling strategies in order to reaccelerate soda maker demand and further increase household penetration. We are confident that our long history leading the evolution of home carbonation continues to provide us with strong competitive advantages and compelling growth opportunities across the globe.”

Summary of Q1 Results

The company reported first quarter revenue of $118.2 million versus $117.6 million in the first period 2013.

• EBITDA came in at $6.3 million compared with $16.4 million for the same period last year.
• Net income was $1.8 million.
• Diluted EPS came in at $0.08 versus the $0.01 analyst estimate. According to Estimize, their estimated consensus was looking for $0.11. SodaStream reported $0.57 in 1Q13.
• Management reported 52.3 percent in gross margin.
• Operating income for the quarter fell 82.8 percent to $2.3 million, compared with $13.6 million in the first quarter of 2013.
• Cash and cash equivalents at the end of the first quarter totaled $36.1 million.
• SodaStream had $24 million in bank debt as of March 31.

Full Year 2014 Guidance

Management expects revenue increase 15 percent over 2013 revenue to roughly $647.105 million.

• The company sees 2014 EBITDA to increase 11 percent over 2013 EBITDA of $62.2 million.
• Net income is expected to come in at roughly $43.26 million.

Stock Action

Shares of SodaStream closed at $41.12 on Tuesday. In pre-market trading, shares dropped over five percent to 39.05 before rebounding to $40.83. The stock is currently up 1.20 percent at $41.63 in pre-market trading.