DOW JONES NEWSWIRES
Molson Coors Brewing Co. (TAP) posted a 44% drop in
fourth-quarter net income Tuesday, as weaker consumer spending cut
volume at the beer giant.
Brewing is traditionally seen as a defensive industry during a
recession, but Molson Coors' results - together with a recently
reported volume drop from U.S. joint-venture partner SABMiller PLC,
the world's second-largest brewer - offer more evidence that a
global slump in demand for beer may be more severe than
expected.
Molson Coors, which trails only Anheuser-Busch InBev NV
(ABI.BAT) in size, reported net income of $96.8 million, or 44
cents a share, for the latest quarter from $176.2 million, or 96
cents, a year earlier. Earnings per share from continuing
operations fell to 49 cents from 96 cents.
Earnings per diluted share, excluding items, fell to 57 cents a
share from 73 cents.
Revenue figures weren't disclosed.
Analysts polled by Thomson Reuters were expecting 71 cents a
share.
Total worldwide beer volume fell 4.2%. Brewers are recently
discovering that emerging markets such as Russia and China can no
longer be relied on to drive growth, as those economies have slowed
as well.
Pretax profit in Canada dropped 23%, reflecting the weaker
Canadian dollar. Sales to retailers fell 0.6% in Canada. In the
U.K., pretax profit fell 24%, reflecting weakness in the pound.
Earlier Tuesday, Molson Coors's U.S. joint venture with
SABMiller, MillerCoors, posted a 40% drop in fourth-quarter net
income, amid a write-down on its Sparks caffeinated alcoholic
beverage. Volume slid 4.4% to 16.1 million barrels while sales to
retailers dropped 2.3%, hurt by a weaker market and softness in the
Miller Lite brand. MillerCoors said it was "well on its way" to
delivering its goal of $500 million in annual savings by the third
year of combined operations.
MillerCoors agreed in December to stop producing and selling
caffeinated-alcoholic drinks under a settlement with more than a
dozen state attorneys general. The Sparks agreement - in which
MillerCoors agreed to remove caffeine, taurine, guarana and ginseng
from the drink - was a blow to MillerCoors because Sparks had
become the dominant product in the category. But the company said
in December it was confident it could continue to increase Sparks
sales.
Shares closed at $40.50 on Monday and didn't trade
premarket.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com