(Reuters) - Molson Coors Brewing Co’s (TAP.N) fourth-quarter profit blew past Wall Street estimates, as price increases, cost savings and an extra selling week helped offset weak sales volume.
The brewer of Molson Canadian, Coors Light and Blue Moon beers saw its shares rise as much as 4.9 percent on Thursday, after it posted its first profit beat in five quarters.
The company also cited easy comparisons with the year-earlier period, when the weak economy hurt sales and higher fuel and commodity costs pressured profits.
Stifel Nicolaus analyst Mark Swartzberg pointed to a bigger-than-expected margin for MillerCoors, Molson’s U.S. joint venture with SABMiller Plc SAB.L and lower spending in the company’s Canada, U.K. and international units.
“We take the results as another indicator U.S. brewer profitability is improving,” Swartzberg said in a research note.
That is good news for Molson, whose business is concentrated in the mature markets of Canada, Britain and the United States. That concentration is often seen as a disadvantage compared with larger rivals Anheuser-Busch InBev (ABI.BR) and SABMiller, which are strong in developing countries.
In the United States, lingering unemployment - especially among core male beer-drinkers - has led to weak volumes and heavy promotions. That has pressured profits.
But in the latest quarter, Molson’s net income rose to $173.2 million, or 95 cents per share, from $109.8 million or 58 cents per share a year earlier.
Excluding items, earnings were 97 cents per share, topping analysts’ average estimate of 71 cents per share, according to Thomson Reuters I/B/E/S.
Net sales rose 12.2 percent to $937.3 million, also topping Wall Street’s estimate of $924.5 million.
Molson Coors sold 12.2 million hectoliters of beer in the quarter, an increase of 2.6 percent. Yet excluding the extra selling week, volume declined 0.1 percent.
Earlier on Thursday, MillerCoors, the combined U.S. operations of SABMiller Plc and Molson Coors, reported a 32.5 percent jump in quarterly profit.
Molson shares were up or 3.8 percent at $45.53 on the New York Stock Exchange on Thursday morning, off an earlier high at $45.99.
Reporting By Martinne Geller in New York; Editing by Maureen Bavdek, Gerald E. McCormick, Dave Zimmerman and Matthew Lewis