Newly merged Molson Coors Brewing Co.’s third-quarter profits were driven up 69 percent by Canadian sales gained through the marriage of Adolph Coors Co. with Canadian brewer Molson Inc.
The combined Denver- and Montreal- based Molson Coors, which completed its merger in February, posted earnings of $108.2 million, or $1.26 per share, compared with Adolph Coors’ $64.1 million, or $1.68 per share, in the same period last year.
Revenue from Canada made up about a third of the total $1.6 billion in sales. The company beat the average estimate of 14 analysts surveyed by Thomson Financial – $1.23 per share.
Molson Coors shares rose $1.15 on the news to close at $62.85 Tuesday.
Adolph Coors’ sales in Canada were about $17.8 million before the merger. Sales to Canadian retailers rose 1.5 percent because of better weather in July and August, the company said. U.S. sales to retailers showed little change.
“Our third-quarter financial results reflected encouraging volume and financial performance in Canada and the U.S.,” Molson Coors president and chief executive Leo Kiely said in a conference call with investors Tuesday.
“Volumes were better than I expected in Canada, and the U.S. was in line with my expectations,” BMO Nesbitt Burns analyst Karim Salamatian said in an interview.
Investors “will like the operating numbers,” said Salamatian, who has a “market perform” rating on the stock.
But Molson, the world’s fifth-largest beermaker, continues to face heavy competition and discounted prices in some of its largest markets. Molson Coors’ share of sales in Canada declined by three-quarters of a percentage point in the quarter as discount brewers grabbed sales in Ontario, chief financial officer Timothy Wolf said.
Market challenges in the United Kingdom reduced the financial performance of the company’s European business. The company’s Brazil operation continued to report operating losses, Kiely said.
Molson has said it may sell all or part of its Brazilian Cervejarias Kaiser unit. The company is in discussions with third parties about the unit but hasn’t reached a decision on whether to sell it.
Bloomberg News contributed to this report.
Staff writer Tom McGhee can be reached at 303-820-1671 or tmcghee@denverpost.com.
$1.6 BILLION
Third-quarter sales by Molson Coors, about a third of which came from Canadian sales by the combined beermaker
$108.2 MILLION
Third-quarter earnings by Molson Coors, up from $64.1 million in the same period last year by pre-merger Adolph Coors Co.
5
Ranking of Molson Coors among the world’s beermakers by volume
