People are cracking open Coors

November 5, 2015 09:35 AM

Molson Coors Brewing Co reported a better-than-expected quarterly profit, helped by strong demand for its higher-margin brands, which include Blue Moon Belgian White and Leinenkugel's Summer Shandy, in the United States and Europe.

The company gets all its revenue from outside the United States and receives 42 % of profits of MillerCoors LLC, its U.S. joint venture with SABMiller Plc.

MillerCoors reported earlier on Thursday a 3.4 % drop in net sales, hurt by lower demand for its Coors Light beer.

Molson Coors is widely anticipated to make a bid for SABMiller's stake in the MillerCoors venture, after SABMiller and Anheuser-Busch InBev agreed in principle last month to one of the biggest mergers in corporate history.

The combination would almost certainly have to exit from SABMiller's U.S. business to win regulatory approval, analysts have said.

Molson Coors has the right to name new management in the event of a change in control and the right to make the first and last bid for the remaining stake in MillerCoors, both of which could deter potential bidders.

Molson Coors said on Thursday it is focusing on selling more craft-style brews, a fast-growing market, and higher-priced beers.

Consumers in Europe and the United States are increasingly preferring craft brews made by independent players, pushing major beer makers to buy or invest in craft brews.

Molson Coors also named David Heede, chief financial officer of its Europe business, as its interim CFO, effective Nov. 16.

Heede succeeds Gavin Hattersley, who was named chief executive of MillerCoors in September.

The net profit attributable to Molson Coors was $16.6 million, or 9 cents per share, in the third quarter ended Sept. 30, compared to a net loss of $34.4 million, or 19 cents per share, a year earlier.

Net sales fell 13 % to $1.02 billion, as a strong dollar reduced the value of its sales. Net sales have risen only once in the last nine quarters.

Net sales rose 0.7 %, excluding the impact of a strong dollar, the company said.

Excluding items, the company earned $1.40 per share.

Analysts on average had expected earnings of $1.28 per share and revenue of $1.01 billion, according to Thomson Reuters I/B/E/S.

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Sruthi Ramakrishnan, Reuters