SodaStream warns of weak 3rd-quarter revenue; shares plunge

By Sruthi Ramakrishnan

(Reuters) - SodaStream International (SODA.O), the Israeli at-home soda machine maker said to be looking for a buyer, estimated third-quarter revenue below market expectations, raising fears that weak results could put off potential suitors.

The company's U.S.-listed shares fell as much as 22 percent on Tuesday to $21.61, the lowest since the stock's debut in November 2010.

Sales of the company's soda machines have remained weak in the United States as consumers in the company's biggest market opt for healthier drinks such as juices and teas over sodas.

Bloomberg reported in July that SodaStream was in talks with an investment firm to be taken private in a deal valuing the company at $828 million.

SodaStream's shares have nearly halved this year. At Monday's closing, the company was valued at about $576 million.

"I think it makes it harder for a private equity investor, now that the earnings level is lower," Monness, Crespi, Hardt, & Co analyst Jim Chartier told Reuters. "It makes it harder to finance the potential deal."

The company on Tuesday estimated revenue of about $125 million for the quarter ending Sept. 30, citing weak demand in the United States.

Analysts on average estimated revenue of $154.1 million, according to Thomson Reuters I/B/E/S.

The company estimated operating income of about $8.5 million, less than half the $18 million it had posted a year earlier.

J.P. Morgan analysts said shareholders would benefit if the company focused less on penetration in the United States and more on profitability and slashed their price target on the stock to $25 from $40.

The company's quarterly profit has fallen for the past year, mainly because of its problems in the Americas.

"We are very disappointed in our recent performance," Chief Executive Daniel Birnbaum said in a statement.

The results are a "clear indication" that the company needs to alter its course and improve execution across the board, he said.

Israeli financial news daily Calcalist reported in April that SodaStream was in early talks to sell a stake of up to 16 percent to a strategic entity.

In June last year, the same newspaper reported that PepsiCo Inc (PEP.N) had made an offer through Goldman Sachs (GS.N) to buy SodaStream for $2 billion. PepsiCo said the report was untrue.

SodaStream made headlines in January when Hollywood star Scarlett Johansson, the public face of the company, drew fire for working with a business whose largest factory is based in a Jewish settlement in the occupied West Bank.

(Additional reporting by Nayan Das in Bangalore; Editing by Saumyadeb Chakrabarty)