During the 2000s, Monster Beverage (NASDAQ: MNST) took a huge bite out of the beverage industry establishment. Starting from humble beginnings with its former name of Hansen's Natural, Monster initially specialized in natural sodas that offered higher-quality ingredients than higher-profile competition. Yet the advent of energy drinks transformed Monster's business. Now, as consumer preferences continue to shift, Monster has had to plot a course to keep up with changing times.

Coming into Wednesday's fourth-quarter financial report, Monster Beverage investors wanted to see solid gains in sales and earnings. Monster's results were mixed, but a substantial deceleration in sales growth came as somewhat of a shock to shareholders hoping for a better finish to 2017. Let's take a closer look at Monster Beverage and what its most recent numbers say about what's coming down the road.

Image source: Monster Beverage.

Monster Beverage needs a pick-me-up

Monster Beverage's fourth-quarter results didn't sustain positive momentum that the company generated last quarter. Net sales were up just 7.5% to $810.4 million, falling well short of the consensus forecast among those following the stock for $843 million on the top line. Net income rose 16% to $201.3 million, but earnings of $0.35 per share fell short of the $0.37 per share that most investors were looking to see.

Tax reform didn't have a huge impact on Monster's numbers. The company posted a $39.8 million charge due to revaluation of deferred tax assets, and mandatory repatriation of overseas earnings cost the company a minimal $2.1 million.

Growth was relatively uniform across Monster's business. The Monster Energy drinks segment had a 7.6% growth rate, while the energy drink brands that Monster acquired from Coca-Cola (NYSE: KO) as part of their exchange of energy and non-energy products saw sales rise 7.8%. Only the American Fruits & Flavors business struggled, and even it managed to keep revenue flat year over year. Domestic business weighed on Monster's overall results, but growth internationally was stronger. The drink company reported a nearly 9% rise in sales to customers outside the U.S. market. Overall, Monster sold more than 86.5 million cases, up 11%, but per-case sales figures fell $0.30 to $9.31 per case.

What saved Monster's bottom line was strong cost discipline. Operating expenses were down 4%, largely because the company didn't have recurring charges related to terminating distribution agreements. After adjusting for those items, overhead expenses were slightly higher as a percentage of sales from the previous year, but favorable tax treatment helped boost Monster's earnings.