* Q2 adj EPS $1.25 tops Wall Street view for $1.20/shr
* Q2 sales up 11 pct to $883.3 mln; tops Street estimate
* Volume down 0.7 pct
* Shares up 1.3 pct
(Adds CEO comments from interview)
By Martinne Geller
NEW YORK, Aug 3 Molson Coors Brewing Co (TAP.N)
posted a higher-than-expected profit, helped by cost cuts and
higher U.S. beer prices, and expressed optimism that
improvements in the U.S. market would continue.
U.S. beer industry sales trends improved in the second
quarter from the first quarter, the company said.
"Our industry volumes remain soft and we expect 2010 to be
a difficult year for the industry," said Molson Chief Executive
Officer Peter Swinburn on a conference call. But he added that
"recent trend improvements do give us grounds for cautious
optimism moving forward."
Swinburn said that in the first month of the current third
quarter, sales to retailers rose at a mid-single-digit rate in
Canada, but fell at a double-digit rate in the United Kingdom
and at a low single-digit rate in the United States.
He said performance in Canada and the United States has
been largely in line with that of the second quarter, and the
weakness in Britain related to pubs going through their
existing inventories after stocking up for the World Cup soccer
In the United States, Swinburn said sales have improved in
critical areas such as restaurants and convenience stores, and
consumers are slowly beginning to spend more on beer.
"More people are beginning to come into the category; those
people in the category are beginning to trade up," Swinburn
told Reuters in an interview. "It's very gradual, but we're
Molson Coors, which makes beers such as Coors Light, Molson
Canadian and Blue Moon, said net income rose to $237.2 million,
or $1.27 per share, in the second quarter, from $187.3 million,
or $1.01 per share, a year earlier.
Excluding items, Molson earned $1.25 per share, topping
analysts' average estimate of $1.20 per share, according to
Thomson Reuters I/B/E/S.
The company said foreign currency fluctuations boosted its
underlying profit by $11 million.
Net sales rose 10.6 percent to $883.3 million, compared
with a Wall Street forecast of $876.3 million.
The company's volume of beer sold declined 0.7 percent from
the year-earlier period, due to a weak U.S. economy, offset
partially by increases in Canada, Britain and international
Volume in Canada was up 2.6 percent, but sales to retailers
-- a closer gauge of consumer demand -- rose 2.2 percent,
topping Stifel Nicolaus analyst Mark Swartzberg's estimate.
"Molson Coors is known for earnings volatility versus
Street estimates, and one beat does not a trend make,"
Swartzberg said in a research note. "But we believe estimates
are likely to go higher on this result and view the North
America trends as a sign of stable-to-improving industry
Separately, MillerCoors, the combined U.S. operations of
SABMiller Plc SAB.L and Molson Coors, said its net income
rose by nearly 20 percent. [ID:nLDE6711LC]
MillerCoors posted a 2.8 percent rise in net revenue per
barrel, as it sold beer at higher prices -- "a very positive
sign for the U.S. beer market," according to UBS analysts.
"U.S. pricing remained strong," said UBS analyst Kaumil
Gajrawala. "We expect continued, positive MillerCoors trends
through the summer with improving volumes and rational
Americans are drinking alcohol at the highest rate in 25
years, according to a Gallup poll. [ID;nN02112921]
Molson shares rose 1.3 percent to $46.59 on the New York
(Reporting by Martinne Geller; editing by Gerald E. McCormick
and Gunna Dickson)