Molson Coors Brewing Co. (TAP, TPX_A.TO, TPX_B.TO) reported Tuesday a decline in first-quarter profit hurt by expenses related to its recently announced $3.54 billion acquisition of Czech brewer StarBev L.P. Underlying earnings increased and topped the Street estimates on positive beer pricing and cost-savings initiatives, while sales missed view.
MillerCoors LLC, the U.S. joint venture of Molson Coors and SABMiller Plc (SAB.L), reported a higher profit for its first quarter boosted by increased sales.
In a separate statement, Molson Coors said it appointed Gavin Hattersley, current chief financial officer for MillerCoors, as its Global Chief Financial Officer. He will succeed Stewart Glendinning, who has been named the CEO of the company's UK & Ireland business.
In his new role, Glendinning succeeds Mark Hunter, who has been appointed to lead the new business unit to be created following the StarBev acquisition. The new unit adds nine Central European countries to its growth market portfolio. Alain Beyens, current CEO of StarBev, will leave the business upon close of the transaction.
The appointments are contingent upon the closing of StarBev acquisition, which is expected by the end of second quarter this year, pending regulatory approvals.
Molson Coors' first-quarter profit attributable to the company dropped 3.9 percent to $79.5 million. Earnings per share were $0.44, flat with last year on lower share count. The latest quarter results were hurt mainly by $6.1 million expenses related to its planned acquisition of StarBev.
Underlying earnings per share, which excluded items, grew 9.3 percent to $0.47, while six analysts on average, polled by Thomson Reuters, expected earnings of $0.42 per share. Analysts' estimates typically exclude special items.
MillerCoors' first-quarter attributable net income increased to $275.3 million from $234.7 million a year ago driven by positive pricing growth, cost management and favorable mix.
Molson Coors' equity income from its 42 percent share in MillerCoors grew to $118.9 million from last year's $101.2 million.
Molson Coors' net sales for the quarter edged up 0.1 percent to $691.4 million driven by positive beer pricing, but missed Wall Street analysts' estimate of $703.83 million. Worldwide beer volume edged down 0.4 percent to 9.92 million hectoliters.
In the U.S., underlying earnings grew nearly 17 percent, benefited from its strongest net sales per hectoliter quarter in three years.
In Canada and the U.K., the company said it faced margin pressure from higher pension and input inflation. The International segment was hurt by increased expense from the addition of costs related to the Cobra India business and infrastructure investments.
In the quarter, MillerCoors' total net sales increased 3.6 percent to $1.76 billion as net producer revenue per barrel grew 3.8 percent. MillerCoors Chief Executive Officer Tom Long said, "Our sales trends improved, and we saw net revenue growth that was primarily driven by strong mix, positive pricing and unseasonably warm weather, particularly around St. Patrick's Day."
In the U.S., Molson Coors shares are currently trading at $41.01, down $1.03 or 2.45 percent.
by RTT Staff Writer
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