Monster sapped of energy after earnings miss

Monster Beverage was the worst performer on the S&P 500, after it said a deal with Coca-Cola had weighed on first-quarter profits and analysts at Goldman Sachs downgraded the stock.

The energy drink maker, which is based in Corona, California, reported a 95 per cent decline in profits to $4.4m, or 3 cents a share, in the three months to the end of March, as it recorded $206m in termination fees.

Adjusted earnings of 62 cents a share fell short of expectations for 68 cents. Net sales rose 17 per cent to $627m, ahead of forecasts.

The maker of such drinks as Monster Energy and Peace Tea said profitability had been hurt by the dissolution of agreements with third-party distributors after Coke paid $2.2bn for a 17 per cent stake last year.

Shares in Monster fell 9.5 per cent to $129.83 and analysts at Goldman lowered their full-year earnings forecasts for 2015, 2016 and 2017 by 2-4 per cent. They downgraded the stock from "buy" to "neutral" while maintaining a price target of $150.

"While we remain constructive on the long-term growth opportunity for Monster Beverage and view the pending Coke deal as transformational, we now see more limited upside," said Judy Hong, an analyst at Goldman.

She said the stock was trading at 43 times its price-to-earnings ratio, a valuation that reflected the deal, which is expected to close in June.

AOL shares climbed 11 per cent to $43.80, after first-quarter sales and adjusted earnings eclipsed market expectations. Results were buoyed by the media group's shift into the programmatic advertising market, where media buyers and sellers buy ad space online through algorithms.

Profits at the owner of the Huffington Post and Moviefone fell 25 per cent from a year earlier to $7m, or 9 cents a share, in the three months to the end of March. Sales climbed 7 per cent to $625m, above Wall Street forecasts for $594m.

Adjusting for certain items, AOL said it had earned 34 cents a share, two cents ahead of analyst expectations.

Shares of Bojangles, the southern chain known for chicken and biscuits, surged as much as 47 per cent in its debut on the Nasdaq on Friday to $27.90, lifting the valuation to about $1bn.

Bjoangles sold 7.75m shares at $19 apiece on Thursday, raising $147m in an initial public offering.

Shares of Sprouts Farmers Market declined 9 per cent to $27.53, it said same-store sales growth had slowed for a fifth consecutive quarter.

The upscale grocer, which is based in Phoenix, said first-quarter same-store sales, an important industry metric, had grown 4.8 per cent, slower than expectations of 5.9 per cent. Sprouts reported earnings and sales that fell short of expectations.

US stocks rallied after the latest jobs report showed that hiring by US employers rebounded in April.

The S&P 500 climbed 1.2 per cent to 2,113.42, the Dow Jones Industrial Average rose 1.5 per cent 18,185.85, and the Nasdaq Composite rose 1.2 per cent to 5,002.69.

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