CCL Coca Cola Amatil Limited

Monster Beverage Corp. posted better-than-expected increases in profit and revenue because of improvements in distribution through its agreement with Coca-Cola Co., which owns nearly 17% of the energy drink maker.

Shares rose 12.7% to $144.19, wiping out much of the year's losses, and are now down 3.3% for the year.

Monster grappled in recent quarters with disruptions as it switched who put its products on store shelves. Coca-Cola Co. paid $2.15 billion in 2014 to acquire a 16.7% stake in Monster as part of an asset swap in which it also became Monster's preferred distributor. In the first quarter last year, the company took a $206 million charge from terminating its previous distributor agreements.

Chief Executive Rodney Sacks said Monster was "seeing improvements in our levels of distribution" from Coke. He also said that Monster had reached agreements with a number of other international Coke bottlers. Monster energy drinks will start selling in Australia and New Zealand in May as a result of a new agreement with Coca-Cola Amatil.

Still, he said results were hurt by distributor transitions and "uncertainties" in the international distribution network that didn't include Coca-Cola.

Over all, Monster Beverage reported a profit of $168.9 million, or 79 cents a share, up from $4.4 million, or 3 cents a share, a year prior. Excluding the distribution deals written down in the year-ago quarter and other items, per-share profit rose to 80 cents from 64 cents.

Revenue increased 8.5% to $680.2 million.

Analysts polled by Thomson Reuters had projected adjusted profit of 74 cents a share on $657 million in revenue.

Friday, Monster Beverage said it would buy up to $2 billion of its shares through a modified "Dutch auction" tender offer, a move consistent with the company's previously announced plan to return capital to shareholders.

In a typical Dutch auction, all buyers submit the number of shares and their selling price, from which the company determines how much everyone will receive. Monster's two founders said they may participate in the offer, but the company said the founders will continue to hold a majority of their current shares if they do participate.

Write to Austen Hufford at austen.hufford@wsj.com

Corrections & Amplifications: Revenue increased 8.5% to $680.2 million. An earlier version of this article incorrectly stated the company's revenue was $860.2 million. (April 29)

(END) Dow Jones Newswires

April 29, 2016 14:55 ET (18:55 GMT)

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