2nd UPDATE:Molson Coors 3Q Net Up;Co Unwinding Forster's Swap
November 03 2010 - 3:24PM
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 a certain
swap that gave it exposure to the stock of Australia's Foster's
Group Ltd. (FGL.AU, FBRWY). 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.
"We came to the decision that this is something we didn't need
to have anymore," Chief Executive Peter Swinburn said in an
interview. He didn't specify why Molson Coors had made the decision
or the implications of the move. "You have to interpret it
whichever way you see," he said, when asked if the changes to the
swap position reflected less interest in Foster's.
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 beer makers 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%.
Pretax profit from the company's U.S. business grew 34%, driven
by MillerCoors LLC's results. 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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