Molson Coors Q2 Results Top Estimates

(RTTNews) - Beer Brewer Molson Coors Brewing Co. (TAP-A, TAP) reported Wednesday a profit for the second quarter that grew nine percent from last year, reflecting net sales growth and improved performance from MillerCoors and Europe. Both adjusted earnings per share and quarterly net sales topped analysts' expectations.

"In the second quarter, Molson Coors increased underlying after-tax income nearly 8 percent, grew underlying EBITDA 4 percent, and expanded gross, operating and after-tax margins. Underlying earnings per share increased nearly 7 percent, and U.S. GAAP after-tax earnings increased 9.5 percent versus a year ago," President and CEO Peter Swinburn said in a statement.

Denver, Colorado-based Molson Coors, which makes Coors Light and Blue Moon beers, posted net income attributable to the company of $290.9 million or $1.56 per share for the second quarter, higher than $267.3 million or $1.45 per share in the prior-year quarter, which included $0.01 per share of income from discontinued operations.

Excluding special items, underlying after-tax income for the quarter was $292.7 million or $1.57 per share, compared to $271.3 million or $1.47 per share in the year-ago quarter.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $1.46 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter edged up 0.9 percent or 0.5 percent in constant currency, to $1.19 billion from $1.18 billion in the same quarter last year, and topped six Wall Street analysts' consensus estimate of $1.18 billion.

Molson Coors' global beer volume for the quarter edged down 0.9 percent from last year to 16.6 million hectoliters.

Molson Coors Canada net sales declined 7.5 percent or 1.4 percent in constant currency, to $516.5 million, while Molson Coors Europe net sales grew 7.4 percent or 0.6 percent in constant currency, to $629.4 million from the year-ago quarter. Molson Coors International net sales improved 25.9 percent or 28.5 percent in constant currency, to $43.7 million from last year.

Canada underlying pretax income decreased 6.5 percent or 1.6 percent in constant currency, to $120.9 million, reflecting the loss of the Modelo brands and unfavorable foreign currency. Sales volume decreased 2.0 percent, but net sales per hectoliter edged up 0.5 percent in local currency.

Europe underlying pretax income increased 13.3 percent or 6.9 percent in constant currency, to $86.8 million. Europe sales volume decreased 1.3 percent, but net sales per hectoliter increased 1.9 percent in local currency.

International segment posted an underlying pretax loss of $3.7 million, wider than $3.1 million a year ago. Total International sales volume, including royalty volume, increased 21.6 percent, but net sales per hectoliter decreased 6.7 percent.

At MillerCoors LLC, the U.S. joint venture with SABMiller plc (SAB.L, SABMRY.PK), underlying equity income grew 10.3 percent to $190.1 million from last year. Molson Coors has a 42 percent economic interest in MillerCoors, which is accounted for using the equity method. The company sells beers such as Miller Lite and Coors Lite in the U.S.

However, total net income attributable to MillerCoors was $445.2 million, up from $412.7 million last year. MillerCoors underlying net income increased 8.0 percent to $445.7 million, driven by positive pricing, sales mix and cost savings.

MillerCoors' net sales for the quarter grew 2.2 percent to $2.21 billion from last year. Total company net revenue per hectoliter increased 3.1 percent, and contract brewing volumes grew 6.4 percent.

MillerCoors' total net revenue per barrel, excluding contract brewing and company-owned distributor sales, increased 3.6 percent. Sales-to-retailers (STRs) decreased 1.2 percent, and sales-to-wholesalers (STWs) declined 1.7 percent.

"In the second half of 2014, we will manage through the aftermath of the flooding in Central Europe and the loss of the Modelo brands in Canada. We also expect higher brand investments in all of our businesses, which is part of our strong and consistent execution of our brand-led profit growth strategy as a driver of total shareholder return," Swinburn added.

In Wednesday's regular trading session, TAP is currently trading at $71.35, up $4.14 or 6.16% on a volume of 1.28 million shares.