UPDATE:Molson Coors 3Q Net Up 37% On Tax Rate, Gain;Sales Off
(Adds comments from a conference call and share price, in the second
paragraph.)
DOW JONES NEWSWIRES
Molson Coors Brewing Co.'s (TAP) third-quarter earnings rose 37% on a
derivative gain, cost cuts and a sharply lower tax rate.
But the company saw a drop in global volumes and said during a conference call
that it expects global beer markets to remain soft. Early in the fourth quarter,
the company said sales to retailers were down in the U.K. and Canada as well as
for its U.S. joint venture Miller Coors. Molson Coors shares were recently down
4.3% to $47.22.
The brewing industry has seen sales soften as consumers cut back their
spending habits or have shifted to cheaper options. Earlier Wednesday,
MillerCoors LLC--the joint venture of Molson Coors and SABMiller PLC's (SBMRY,
SAB.JO) U.S. brewing operations--said its profit jumped 37% on cost cuts and
increased sales of its cheaper beers.
Molson Coors reported earnings of $235.3 million, or $1.26 a share, up from $
171.3 million, or 92 cents a share, a year earlier. Excluding items such as the
gain from ending a stock-related swap contract, earnings rose to $1.14 a share
from 93 cents a share as the quarter's tax rate was 9%--significantly lower than
the company's expected long-term rate of 22% to 26%.
Net sales fell 7.3% to $853.7 million as volume dropped 2.9%.
Analysts polled by Thomson Reuters forecast earnings of 98 cents a share on $
837 million in sales.
Gross margin rose to 44.6% from 43.1% on the cost cuts.
Molson Coors said the volume drop was "driven by challenging markets, a weak
global economy" and the company's U.K. strategy of emphasizing revenue growth
over low-margin volume growth. Earnings there grew 6.5%.
The company said pretax profit from its U.S. business jumped 17%, and profit
from its Canadian unit fell 2%. Molson Coors said in August it would make a hard
push to improve sales of Molson Canadian and other products in Canada, where it
had lost market share.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@
dowjones.com;
(END) Dow Jones Newswires
11-04-091202ET
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