Tags: Molson | Profit | Economy | Beer

Molson Profit Slumps as Economy Saps Beer Money

Wednesday, 02 Nov 2011 10:20 AM

Molson Coors says third-quarter profit tumbled 23 percent because of higher costs, the poor economy and surprisingly weak sales in the U.K.

Molson Coors Brewing Co. and other major beer makers have struggled with weak sales as consumers cope with the down economy. It has hit these brewers hardest as its core consumer — young men — face particularly high levels of unemployment.

The Denver-based company is also struggling with higher costs for fuel, packaging and ingredients.

The maker of Coors Light, Molson Canadian and Carling said Wednesday that its net income fell to $197.4, or $1.06 per share, for the July-September period from $256.1 million, or $1.38 per share, a year ago. Excluding one-time items related to writing down its Sparks brand and other costs, earnings came to $1.14 per share. Analysts expected $1.25 per share, according to FactSet.

Revenue rose 9 percent to $954.4 million. Analysts expected $942.4 million.

Its shares fell $1.26, or 3.1 percent, to $39.07 in premarket trading.

In addition to the weak economy and high costs, Molson Coors said it faced higher marketing, general and administrative expenses in the U.S. during the quarter related to higher information system spending, higher marketing costs and a depreciation charge.

In the U.K., the company faced lower volume, lower prices and higher marketing costs. Sales to retailers declined 3 percent due to the weak economy and lower off-premise, or take-home, volume.

"We did not expect the degree of softness in the U.K. market," said CEO Peter Swinburn.

Total worldwide beer volume fell 0.8 percent during the quarter.

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Molson Coors says third-quarter profit tumbled 23 percent because of higher costs, the poor economy and surprisingly weak sales in the U.K. Molson Coors Brewing Co. and other major beer makers have struggled with weak sales as consumers cope with the down economy. It has...
Molson,Profit,Economy,Beer
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2011-20-02
Wednesday, 02 Nov 2011 10:20 AM
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