By William Spain
CHICAGO (Dow Jones) -- In the second quarter after its U.S.
operations were subsumed into a joint venture with SABMiller,
Molson Coors reported Tuesday that profit fell sharply due to
currency fluctuations and lower volume.
Before the start of trading, Molson Coors said it earned $96.8
million, or 44 cents a share, in the period, down from $176.2
million, or 96 cents a share, in the year-ago quarter.
On an adjusted basis, the company said it would have earned 57
cents a share, down 21%.
Sales were cut by more than half, falling to $739 million from
$1.6 billion on the spin-off of its U.S. operations and a volume
decline of 4.2%.
The average estimate of analysts polled by Thomson Reuters had
been for Molson Coors to earn 71 cents a share on sales of $792
billion.
"Our lower fourth-quarter financial results reflect the combined
challenges of a much stronger U.S. dollar versus a year ago,
significant commodity inflation, and lower sales volume in our
major markets," said Peter Swinburn, chief executive, in the
earnings report. "Foreign currency movements alone accounted for
more than 55% of the year-over-year decline in fourth-quarter
profit, and input cost inflation across all of our businesses added
another $41 million of headwinds to the quarter."
Shares of Molson Coors fell 6% to $38.04 in early trading.
The joint venture, named MillerCoors, was officially launched at
the beginning of July. The combined entity is 58% owned by
SABMiller with the balance in Molson Coors' hands. It has a U.S.
market share of roughly 30% and an estimated $7 billion in annual
revenue.
That venture posted a 40% drop in fourth-quarter profit, largely
due to charges, while volume fell 4.4% to 16.1 million barrels and
sales to retailers dropped 2.3%. Knocking out the charges, profit
would have increased 21%, the company said.
MillerCoors' total net sales were up 3.1% to $1.740 billion as
price increases offset the volume declines.