Molson Coors, MillerCoors Report Profit Rise
May 03 2016 - 1:56PM
Dow Jones News
By Tripp Mickle
Molson Coors Brewing Co. reported a profit in the first quarter
after its U.S. joint venture, MillerCoors LLC, succeeded in
stemming volume declines of Miller Lite and Coors Light for the
first time since 2008.
Miller Lite and Coors Light volumes were flat in the U.S. It is
the first time in several years they haven't lost ground to craft
brews.
MillerCoors said the brands, which account for more than 50% of
profits, have now posted four consecutive quarters of market share
gains in the light beer category, which is dominated by
Anheuser-Busch InBev NV's Bud Light.
MillerCoors, which is co-owned by Molson and SABMiller PLC, said
the strong performance of Miller Lite and Coors Light helped the
joint venture increase profit 10% to $335.3 million from $304.6
million. The company also benefited from lower fuel and aluminum
costs.
MillerCoors' improved performance comes as Molson works to close
a $12 billion deal to assume full control of the joint venture. The
acquisition is expected to close in the second half of the year
after AB InBev NV completes its roughly $108 billion deal for
Molson's joint venture partner, SABMiller.
Excluding numerous special items, Molson said profit rose to
$110.3 million, or 54 cents, from $86.1 million, or 46 cents a
share. Analysts polled by Thomson Reuters had forecast 43 cents a
share in earnings.
Sales fell 6.1% to $657.2 million in the period, but exceeded
analysts' expectations for $626 million in sales. The company said
declines in the value of foreign currencies like the Canadian
dollar had a negative impact on sales of $43.5 million.
In addition to benefiting from MillerCoors results, Denver-based
Molson said it increased non-U.S. beer volume 1.2% to 9.9 million
barrels. The increase was driven largely by the brewer's European
business, which increased sales volume 5.2% to 3.4 million
barrels.
Strong sales of the company's Carling and Coors Light brands
helped Molson gain share in a European market where industry
volumes were flat.
The company's Canadian business, which accounts for about 40% of
sales, continued to struggle. Volumes declined 4.7% to 1.2 million
barrels as sales slid due in part to weak economic conditions in
provinces like Alberta, where low oil prices have triggered
layoffs.
"Consumers (in Canada) generally are choosing to invest their
hard-earned dollars in some of the craft segments," said Molson
Chief Executive Mark Hunter during a call with analysts. "The
exception to that has been Alberta, where the economy is under a
lot of pressure."
For the period ended March 31, Molson said profit rose to $158.8
million, or 78 cents a share, from $81.1 million, or 43 cents a
share, a year earlier.
The brewer's profit for the quarter was aided by a $108.6
million gain on the $110.4 million sale of its Vancouver brewery.
It also recognized $15.5 million in charges related to the planned
closure of MillerCoors' Eden, N.C. brewery and a $51.4 million loss
related to the costs of its pending acquisition of MillerCoors.
Anne Steele contributed to this article.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
May 03, 2016 13:41 ET (17:41 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Molson Coors Brewing (NYSE:TAPA)
Historical Stock Chart
From Jul 2024 to Aug 2024
Molson Coors Brewing (NYSE:TAPA)
Historical Stock Chart
From Aug 2023 to Aug 2024