DENVER-
Molson Coors Co., one of the world’s largest brewers, said Tuesday it swung to a first-quarter profit as it boosted sales in Canada and the United States and achieved additional savings from its 2005 union.
The results from the maker of Coors Light beer beat Wall Street’s expectations, which helped send its stock price 2.3 percent higher.
In an interview with The Associated Press, Leo Kiely, president and chief executive officer, attributed the improvement to momentum that has built since the two companies were combined.
“The fact that we showed growth of our key brands in every one of our markets really gives us, the market and our own organization a lot of confidence as we head into the peak season,” he said.
Kiely does not believe prices will be outside the norm this summer, but said, “That doesn’t mean it won’t be competitive.”
The biggest challenge facing the brewer is dealing with inflation in commodities pricing, he added.
For the quarter ending April 1, Denver-based Molson Coors reported a profit of $4.4 million, or 5 cents per share, compared with a net loss of $30.2 million, or 35 cents per share, in the first quarter of 2006.
Excluding $8.2 million in restructuring charges, the company said its income from continuing operations was 28 cents per share, compared with a loss of a penny per share in the 2006 quarter.
Analysts polled by Thomson Financial expected earnings of 24 cents per share.
Revenue before excise taxes rose 7 percent to $1.65 billion from $1.54 billion, while volume increased 3 percent. After excise taxes were deducted, net sales rose to $1.23 billion from $1.15 billion.
Molson Coors, formed from Molson Inc. and Adolph Coors Co., saw about $14 million in acquisition and other cost savings during the quarter.
“Our merger synergies and other cost-reduction programs allowed us to offset three-fourths of the cost of goods inflation companywide,” Kiely told analysts during a conference call.
Citigroup analyst Bonnie Herzog said in a research note Molson Coors reported stronger volume growth trends than other brewers.
In the U.S., Molson Coors said sales rose 7 percent with volume up 5 percent on growth of its key brand, Coors Light, and double-digit sales increases in Keystone Light and Blue Moon products.
Canadian sales to retail stores rose 1.2 percent and volume was up 2.8 percent.
Sales in Europe were up although the volume declined 1.7 percent in a year-over-year comparison. Herzog attributed the decline to a European trend that favors off-premise consumption of beer.
Its shares rose $2.15 to $98.21 in afternoon trading after briefly reaching a 52-week high of $99.24.
