DENVER—Molson Coors Brewing Co., one of the world’s largest brewers, on Tuesday reported a jump in first-quarter profit as its sales rose more than 10 percent on growth in its U.S. and Canadian businesses.
The results were released as the Denver-based company behind brands like Coors Light, Blue Moon and Keystone Light works on a plan to combine its U.S. operations with SABMiller, maker of Miller Lite. The companies hope to have the deal finalized by mid-year pending government approval.
“We are smack in the middle of the process,” Chief Executive Officer Leo Kiely told analysts during a conference call. “We are doing everything we possibly can to get off to a fast start within the guidelines.”
Kiely, who will head the joint venture, said it will help reduce the distance from brewery to market by one-third which will help reduce costs.
Its stock climbed 6.5 percent in early afternoon trading.
Molson Coors said net income for the quarter that ended March 30 totaled $37.1 million, or 20 cents per share, compared with $4.4 million, or 3 cents per share, in the year-ago quarter.
The company took a $7.3 million charge related to expenses for its joint venture plan with SABMiller, employee retention and other costs. Excluding the charge, the company earned 32 cents per share.
Net sales after excise taxes rose to $1.36 billion from $1.23 billion as business improved in all three of Molson Coors’ key markets, Canada, the United States and even Great Britain, where it has faced a challenging business environment. The cost of goods per barrel rose 5.5 percent overall.
Analysts polled by Thomson Financial predicted a profit of 28 cents on net sales of $1.31 billion. The earnings estimates typically exclude one-time items.
In the United States, sales to retail stores rose 6.6 percent on double-digit growth in the craft beer Blue Moon, Coors Banquet and Keystone Light. Growth for Coors Light was in the mid-single-digit range.
In Canada, sales to retail stores rose 2.5 percent as the company posted double-digit growth for Coors Light, Creemore and Carling. It also reported a $9 million benefit in favorable currency exchange.
In Great Britain, the company credited a 1 percent increase in sales volume to the Easter holiday and consumers stocking up before a beer excise tax increase.
Molson Coors said it cut costs by $29 million in the quarter as part of a three-year program to achieve $250 million in cost savings.
Its shares rose $3.43, or 6.5 percent, to $56.59 in afternoon trading after rising to a 52-week high of $57.74 earlier in the session.
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