CHICAGO, Aug 3 (Reuters) - Molson Coors Brewing Co reported a higher-than-expected quarterly profit on Monday, helped by increased beer prices and savings from its U.S. joint venture with SABMiller Plc.
Tim Ghriskey, chief investment officer with New York-based Solaris Asset Management, cited aggressive cost-cutting by the maker of Coors Light and Molson Canadian as well as stronger-than-expected pricing.
'Expectations were low for this quarter. There was concern about price competition in Canada,' said Ghriskey, whose firm does not own Molson Coors shares but follows the sector. 'In this competitive environment, to raise prices certainly shows strong underlying demand.'
Second-quarter net income more than doubled to $187.3 million, or $1.01 a share, from $79.4 million, or 42 cents a share, a year earlier, when the company recorded charges from the joint venture and wrote down Molson brands.
Income from continuing operations, excluding items, was $1.11 a share, easily topping the 96 cents analysts polled by Reuters Estimates had expected.
Stifel Nicolaus analyst Mark Swartzberg said in a research note that the company's 22 percent underlying tax rate was four percentage points lower than he had expected, contributing about 6 cents a share to the upside.
For the rest of the year, Molson Coors expects challenges stemming from competitive price discounting in Canada and higher costs, Chief Executive Peter Swinburn said in a statement.
Molson Coors generally does not give earnings forecasts.
Sales tumbled 55 percent to $798.9 million, but topped the analysts' average forecast of $765.0 million. The sales decline was particularly steep because the year-earlier results included U.S. sales that have fallen under the MillerCoors joint venture since its formation in July 2008.
Molson Coors said global beer volume fell 3.2 percent on a pro forma basis because of poor weather in key areas, the weak global economy and its strategy to emphasize revenue growth over low-margin volume growth in the United Kingdom. Coors Light volume rose 3 percent.
Molson Coors combined its U.S. operations with those of SABMiller to form MillerCoors, which earlier on Monday reported a 16.4 percent rise in second-quarter net income while accelerating the timing of its merger savings.
MillerCoors now expects cost savings of $260 million by the end of 2009, up from the original forecast of $225 million. Its overall projection for cost savings from the merger is unchanged at $500 million.
Shares of Molson Coors were up $1.25, or 2.8 percent, at $46.46 in morning New York Stock Exchange trading.
(Reporting by Ben Klayman, editing by Gerald E. McCormick and Lisa Von Ahn) Keywords: MOLSONCOORS/ (benjamin.klayman@thomsonreuters.com; +1 312 408 8787; Reuters Messaging: ben.klayman.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Tim Ghriskey, chief investment officer with New York-based Solaris Asset Management, cited aggressive cost-cutting by the maker of Coors Light and Molson Canadian as well as stronger-than-expected pricing.
'Expectations were low for this quarter. There was concern about price competition in Canada,' said Ghriskey, whose firm does not own Molson Coors shares but follows the sector. 'In this competitive environment, to raise prices certainly shows strong underlying demand.'
Second-quarter net income more than doubled to $187.3 million, or $1.01 a share, from $79.4 million, or 42 cents a share, a year earlier, when the company recorded charges from the joint venture and wrote down Molson brands.
Income from continuing operations, excluding items, was $1.11 a share, easily topping the 96 cents analysts polled by Reuters Estimates had expected.
Stifel Nicolaus analyst Mark Swartzberg said in a research note that the company's 22 percent underlying tax rate was four percentage points lower than he had expected, contributing about 6 cents a share to the upside.
For the rest of the year, Molson Coors expects challenges stemming from competitive price discounting in Canada and higher costs, Chief Executive Peter Swinburn said in a statement.
Molson Coors generally does not give earnings forecasts.
Sales tumbled 55 percent to $798.9 million, but topped the analysts' average forecast of $765.0 million. The sales decline was particularly steep because the year-earlier results included U.S. sales that have fallen under the MillerCoors joint venture since its formation in July 2008.
Molson Coors said global beer volume fell 3.2 percent on a pro forma basis because of poor weather in key areas, the weak global economy and its strategy to emphasize revenue growth over low-margin volume growth in the United Kingdom. Coors Light volume rose 3 percent.
Molson Coors combined its U.S. operations with those of SABMiller to form MillerCoors, which earlier on Monday reported a 16.4 percent rise in second-quarter net income while accelerating the timing of its merger savings.
MillerCoors now expects cost savings of $260 million by the end of 2009, up from the original forecast of $225 million. Its overall projection for cost savings from the merger is unchanged at $500 million.
Shares of Molson Coors were up $1.25, or 2.8 percent, at $46.46 in morning New York Stock Exchange trading.
(Reporting by Ben Klayman, editing by Gerald E. McCormick and Lisa Von Ahn) Keywords: MOLSONCOORS/ (benjamin.klayman@thomsonreuters.com; +1 312 408 8787; Reuters Messaging: ben.klayman.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.