Out of the Gate: Hansen drops on disappointing 1st quarter

Goldman Sachs analyst Judy Hong downgraded the stock to "Neutral" from "Buy" on the results, and cut her profit estimates for 2008, 2009 and 2010.

Hansen stock tumbled $4.20, or 11.8 percent, to $31.40 in morning trading. Earlier, shares traded as low as $28.51, their lowest trade since December 2006.

Hong said growth in Monster sales was surprisingly weak, and she now expects slower sales growth.

Hong said most of the shortfall came from Hansen's decision to invest more money in its own business. She said that move could lead to weak profit margins for the rest of the year.

Six analysts still have a "Buy"-equivalent rating on Hansen shares. Gregory Badishkanian of Citi Investment Research maintained a "Neutral" rating, but he cut his profit estimates over the next three years and lowered his share price target to $39 from $46.

He said Hansen is selling more Java coffee drinks, which are not as profitable as Monster drinks.