MONTREAL - Molson Coors Brewing Co. beat expectations as net earnings increased 9.5 per cent to US$290.7 million in the second quarter on higher revenues.
The Montreal and Denver-based brewer, which reports in U.S. dollars, earned $292.7 million in underlying profit during the three months ended June 30, up from $271.3 million a year earlier.
That translated into $1.57 per share, 10 cents per share above last year's results and analyst forecasts.
Revenues grew nearly one per cent to $1.2 billion even though worldwide beer volume fell to 16.6 million hectolitres.
Molson Coors (NYSE:TAP, TSX:TPX.B) said the results were driven by improved performances in the U.S. and Europe, along with lower interest expenses.
"We continued to build a bigger and stronger brand portfolio that is delivering value-added innovation, continued investment in our core brands, and increased our share in above premium (beer)," said CEO Peter Swinburn, who is retiring at the end of the year.
He will be replaced by Mark Hunter, 51, who has headed the European business since January 2013.
In Canada, adjusted pre-tax income decreased 6.5 per cent to $120.9 million, due to the loss of Mexican Modelo brands and a lower Canadian dollars that had a negative $6.3 million impact, partially offset by cost savings.
Sales were $516.5 million, down from $558.2 million last year, while sales volume decrease two per cent.
Molson Coors underlying share of profits from the MillerCoors joint venture in the U.S. increased 10.3 per cent to $190.3 million.
In Europe, adjusted profits were $84.5 million, up from $75.8 million. International losses decreased to $3.7 million, from $4 million.
The company's net debt was $3.15 billion, down $612 million from the prior year.
Mark Swartzberg of Stifel Nicolaus said the results are evidence of an improving margin outlook, especially in the U.S. and in Canada, where new cost reductions are being contemplated.
"We also expect increasing discipline around costs and margins with Mark Hunter becoming CEO. This has been a hallmark of his time as chief of the company's businesses in Europe," he wrote in a report.
On the New York Stock Exchange, Molson Coors shares gained $3.49 or 5.19 per cent at $70.70 in Wednesday morning trading.
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