Denver-based Molson Coors Brewing Co. reported increased earnings Tuesday but missed analyst targets, and its stock took a beating.
The world’s fifth-largest brewer reported second-quarter earnings more than four times higher than the same period a year before, in part because of tax-rate reductions in Canada and an increase in sales volume.
Net income was $156.2 million, or $1.81 per share, up sharply from $38.5 million, or 45 cents per share, a year ago, the company said.
Excluding 60 cents a share for the tax gain and 19 cents in one-time costs, Molson Coors earned about $1.40 a share. The company was expected to post $1.51 a share of profit, the average estimate of 14 analysts surveyed by Thomson Financial.
The missed target sent shares down $3.95 to close at $67.50.
Molson Coors said it saw $27 million in cost savings in the second quarter, but those savings were negated by increased transportation and commodity costs.
The company ships its beer eight to nine times farther than its competitors, on average, said Timothy Wolf, the brewer’s chief financial officer. A new brewery and a package plant in Virginia are scheduled to open next summer, offsetting much of that transportation cost, executives said.
“Transportation, fuel and diesel-related costs are going to affect us and hurt us more than our competition,” Wolf said.
Molson Coors said it will close its Memphis, Tenn., brewery six months earlier than planned for an annual cost savings of $32 million.
On Monday, The Globe and Mail newspaper of Toronto reported that Molson Coors is one of four bidders for Canada’s No. 3 brewer, Sleeman Breweries in Ontario. The other bidders are InBev’s Labatt Brewing Co., Grolsch and Sapporo.
Representatives from both brewery companies declined to comment, although Sleeman said in May it was looking for a buyer.
Bloomberg News contributed to this report.
Staff writer Beth Potter can be reached at 303-820-1503 or bpotter@denverpost.com.
