Carbnonated home drink manufacturer Sodastream International Ltd. (Nasdaq: SODA) is falling sharply on Wall Street after issuing a profit warning.
The Israeli company has reported preliminary third quarter results of $125 million revenue and $8.5 million profit. Analysts had expected $154 million revenue.
Sodastream's share price had already fallen 4.6% yesterday to $27.57 and fell a further 17.4% in premarket trading to $22.77, giving a market cap of $577.8 million.
SodaStream CEO Daniel Birnbaum said, "We are very disappointed in our recent performance, Our US business underperformed due to lower than expected demand for our soda makers and flavors, which was the primary driver of the overall shortfall in the third quarter. While we were successful over the last few years in establishing a solid base of repeat users in the US, we have not succeeded in attracting new consumers to our home carbonation system at the rate we believe should be achieved."
He added, "The third quarter results are a clear indication that we must alter our course and improve our execution across the board. We have already begun a strategic shift of the SodaStream brand towards health and wellness, primarily in the US, where we believe this message will resonate more strongly with consumers."
"We firmly believe that our actions to shift the brand and improve execution will strengthen our leadership position in the home carbonation category and deliver enhanced shareholder value," he concluded.
Published by Globes [online], Israel business news - www.globes-online.com - on October 7, 2014
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