Molson Coors Brewing Co. (NYSE:TAP) (TSE:TPX) Wednesday saw its shares slide as revenues came up just short of Street views and the company warned of a “challenging” fourth quarter.
Shares fell 3.26 per cent as at about 11:45 a.m. EDT, trading at $41.79.
For the three months that ended September 29, the beer company reported profit of $197.7 million or $1.09 per diluted share, up slightly from $194.7 million or $1.05 per diluted share a year earlier.
Excluding items, adjusted income was $248.9 million or $1.37 per share, compared to $212.4 million or $1.14 per share in the year-ago period.
Revenue increased 25.6 per cent to $1.2 billion from $954 million a year ago as the company included for the first time results from Central and East European brewer StarBev, which it acquired in June for $3.4 billion.
Strong results in the U.S. also contributed to bottom-line growth, Molson Coors said.
Analysts polled by Thomson Reuters expected per share earnings of $1.34 on sales of $1.25 billion.
“Regionally, the U.S. had another good earnings quarter, up 16 per cent, while the U.K., Canada and international business units reported lower earnings,” said president and CEO Peter Swinburn.
“In local currency, Central Europe underlying earnings increased nearly 16 per cent in the third quarter on a pro forma basis.
“Nonetheless, we saw a decline in consumer demand across our businesses in the third quarter, and we expect the fourth quarter to be the most challenging of this year, with difficult profit comparisons in Canada and the UK and higher costs in the U.S. and Central Europe.”
Worldwide beer volume grew 30.8 per cent to 17.2 hectoliters, compared to 13.1 hectolitres in the year-ago quarter.
Third quarter gross margin rose to 30.6 per cent from 28.9 per cent.
The Canada business reported that underlying pretax income decreased 7.1 per cent to $150.7 million in the quarter, while underlying income in local currency decreased five per cent.
The company’s U.S. business, MillerCoors, reported that underlying net income for the quarter, excluding special items, increased 13.5 per cent to $325.6 million, driven by positive pricing, favorable brand mix and continued strong cost management.
Its Central Europe business saw pretax income decrease 2.2 per cent to $79.8 million in the quarter, due to unfavorable foreign currency movements. In local currency, underlying income increased nearly 16 per cent.
The U.K. segment’s underlying pretax income decreased 63.1 per cent to $10.1 million in the quarter, due to lower volume, higher input inflation and pension expenses.
Beer giant Molson Coors has signature brands including Molson Canadian, Coors Light and Carling.