UPDATE: Molson Coors 1Q Net More Than Doubles On Increased Prices
05 Maggio 2009 - 7:41PM
Dow Jones News
Molson Coors Brewing Co.'s (TAP) first-quarter earnings more
than doubled as the beer maker increased prices and benefited from
its new U.S. joint venture.
The company's newly formed joint venture with SABMiller
(SAB.JO), MillerCoors, continued to achieve cost savings faster
than planned and reported a 51% jump in first-quarter earnings on a
pro-forma basis. Molson Coors shares were recently up 12% to $43 as
earnings beat expectations.
By the end of this year, MillerCoors expects to achieve $238
million in cost savings, surpassing its original forecast of $225
million. On a conference call, Molson Coors said the joint venture
grew sales to retailers at a low single digit rate early in the
second quarter.
The company's U.K. operations continued to stay weak as volumes
fell in the region due to continuing weakness in the economy,
contributing to a 2.7% drop in global beer volume. In an interview,
Chief Executive Peter Swinburn said the company doesn't expect a
major turnaround in that business in the short term, but added that
the company is feeling more "confident" in its outlook for the U.K.
operations as it has raised prices and invested in its brands.
Molson Coors' first-quarter earnings were $75.7 million, or 41
cents a share, compared with $34.3 million, or 19 cents a share, a
year earlier. The results included losses from discontinued
operations of 2 cents and 5 cents, respectively. Net sales fell 59%
to $559 million because of the MillerCoors venture.
The mean estimate of analysts surveyed by Thomson Reuters was
for earnings of 33 cents a share and revenue of $568 million.
Swinburn said some of the company's cost savings came from improved
negotiations with its suppliers.
In Canada, home to the Molson brand, pretax profit fell 9.4% as
volume was flat.
(Kevin Kingsbury and Kerry E. Grace contributed to this
article)
-By Anjali Cordeiro; Dow Jones Newswires; 201-938-2408;
anjali.cordeiro@dowjones.com