With taxes, the cost of ingredients, the cost of fuel and craft beer’s market share all on the rise, it’s not surprising that Molson Coors Brewing Co.’s fourth-quarter net income fell by more than half. After this announcement, Molson’s shares fell more than four percent last Thursday afternoon.
The Denver based brewery raised prices in the downturn (they had to do something to protect profit margins) and consequently sold less beer as a result.
Molson Coors reported Thursday that it earned $109.8 million, or 58 cents per share, for the quarter that ended Dec. 25. That’s down 51 percent from $222.1 million, or $1.19 per share, a year earlier. Adjusted earnings amounted to 66 cents a share.
Analysts were looking for earnings of 69 cents per share on revenue of $837.4 million. Peter Swinburn, president and CEO of Molson Coors explained by saying, "In the U.S., unemployment amongst our core consumer base remains high, and U.S. beer industry volumes continue to be weak."
The lower–than–expected profit growth in the U.S. overpowered better Canadian results and U.K. results that were in line with expectations, she said in a note to investors. Molson Coors says it sold 1.9 percent less beer globally. The United Kingdom was particularly weak. Sales there fell 4.9 percent.
Swinburn said in 2011 the company will continue cutting costs and expanding its product offerings. For example, in January, it introduced Molson Canadian 67 in Quebec.
In the U.S. it will focus on higher–priced light beer, "craft beer" and imports. The company plans to introduce Miller Genuine Draft lemonade in the summer and promote seasonal versions of its Blue Moon brand.
[techtags:MOLSON COORS, BEER NEWS]