UPDATE: Molson Coors 3Q Net Up 8.8% On Higher Pricing, Revenue Growth
November 03 2010 - 11:54AM
Dow Jones News
Molson Coors Brewing Co.'s (TAP) third-quarter profit climbed
8.8% on higher prices and cost savings, more than offsetting a
decline in worldwide beer volume.
Separately, the company said it has begun to unwind certain
positions it had built through swaps that gave it exposure to the
stock of Australia's Foster's Group (FGL.AU). Molson Coors first
disclosed the Foster's swap, which gave it exposure to nearly 5% of
Foster's common stock, in 2008. At that time the move raised
speculation that Molson Coors might be interested in some kind of a
strategic deal with the Australian alcohol company. On Wednesday,
Molson Coors executives said on a conference call that the company
had decided that it no longer wanted exposure to the Foster's
swap.
Molson Coors posted revenue growth for the fourth consecutive
quarter from year-earlier levels, although volumes have stayed
under pressure. In the latest quarter, worldwide beer volume fell
4%, driven by declines in the U.S. and the U.K.
Beer volumes in the U.S. have been tepid as consumers have cut
back, but beermakers are benefiting from price increases and
international growth. Beer giant Anheuser-Busch InBev N.V. (ABI.BT)
Wednesday also reported a rise in third-quarter profit, as a strong
performance in emerging markets offset weakness in the U.S and
Europe.
Molson Coors posted a profit of $256.1 million, or $1.37 a
share, up from $235.3 million, or $1.26 a share, a year earlier.
Excluding discontinued operations, earnings rose to $1.38 from
$1.31 as net sales increased 2.5% to $875 million.
Analysts surveyed by Thomson Reuters expected a profit of $1.13
on revenue of $877.7 million.
Gross margin widened to 47.7% from 44.6%.
Pre-tax profit from the company's U.S. business grew 34%, driven
by MillerCoors LLC's results, and profit from its Canadian arm was
up 16% in U.S. dollars, and grew 9.9% in local currency on volume
growth and higher pricing.
Earlier Wednesday, MillerCoors--the joint venture of Molson
Coors and SABMiller PLC's (SAB.JO) U.S. brewing operations--said
its third-quarter profit grew 36%, driven by cost-containment and
higher prices.
-By John Kell and Anjali Cordeiro, Dow Jones Newswires;
212-416-2480; john.kell@dowjones.com
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