Molson Coors 2nd-Quarter Net Slumps 53% on Higher Costs |
| Wall Street Journal - Aug 7, 2012 |
Molson Coors Brewing Co.'s (TAP, TAPA) second-quarter earnings slumped 53% on higher costs, though the top line was bolstered by higher volume in Canada and the early benefits of recently acquired European brewer StarBev LP.
Molson has pushed into emerging markets like China for growth, and to get an even greater foothold abroad, the company in June completed its roughly $3.4 billion acquisition of Central and East European brewer StarBev. The deal gives Molson access to a region where the beer market is expanding as the middle class gets bigger, though investors have fretted about the transaction costs and integration worries.
The latest quarter included two weeks of the company's new Central Europe operations. Pro forma sales volume climbed 1.4% but underlying profit slid 37% as volume and pricing gains were more than offset by unfavorable foreign-currency moves and input-cost inflation.
Molson Coors's shares dipped as much as 4% Tuesday despite the company posting better-than-expected adjusted profit and sales in the latest quarter, as investors continue to take a cautious stance on the benefits of the StarBev acquisition. Chief Executive Peter Swinburn told Dow Jones Newswires investors were likely spooked by headline numbers on StarBev and are cautious to see if Molson Coors can deliver.
Read Full Article from Wall Street Journal
- Posted: 2012-08-07 17:34:39
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