Tags: US | Earns | Molson | Coors

Molson Coors' Net Income Rises on Higher Prices

Wednesday, 03 Nov 2010 10:32 AM

Molson Coors Brewing Co. said Wednesday its net income increased by 9 percent in its third quarter on higher prices and cost cutting, even though it sold less beer.

The company has been raising prices in the downturn to protect its brands from being seen as too cheap and protect profit margins, even if the amount of beer sold suffers as a result.

The brewer said its net income was $256.1 million, or $1.37 per share, for the three months ended Sept. 25. That's up from $235.3 million, or $1.26 per share, a year ago.

It says revenue excluding excise taxes rose 2.5 percent to $875 million. But beer sales volume fell 4 percent.

Excluding several one-times items, earnings were $1.28 per share. Analysts expected earnings of $1.13 per share on revenue excluding taxes of $877.7 million, according to Thomson Reuters.

The total amount of beer sold around the world fell 4 percent in the quarter.

People have been curbing beer consumption in the downturn, particularly in bars and restaurants. That has hurt Molson Coors' business.

The amount of beer sold in Britain, where the company has the Carling brand, slumped 12.5 percent in the quarter, worse than an industry drop of 10 percent. Molson Coors said retailers weren't buying as much following their stock-up for the World Cup over the summer.

In Canada, another major market, sales to retailers for the quarter grew 0.4 percent, and the company noted gains in new brands Molson M and Keystone. But mainstays Coors Light and Molson Canadian fell in the low to mid-single digits.

In the U.S., where the company's joint venture with SABMiller sells its beer, sales to retailers dropped 4 percent, continuing a slump.

To offset weakness in more established markets, Molson Coors is increasingly trying to expand in emerging markets such as China. The aim is to woo new drinkers to its Coors Light brand. The unit that includes sales outside the U.S., Canada and Britain saw volume rise 11 percent, though it is a still a tiny portion of Molson Coors' business.

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Molson Coors Brewing Co. said Wednesday its net income increased by 9 percent in its third quarter on higher prices and cost cutting, even though it sold less beer. The company has been raising prices in the downturn to protect its brands from being seen as too cheap and...
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Wednesday, 03 Nov 2010 10:32 AM
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