Coors Light and Blue Moon parent Molson Coors Brewing (NYSE:TAP) recorded better-than-expected third-quarter earnings on Wednesday as its U.S. subsidiary MillerCoors boasted its best revenue growth in four-and-a-half years.
While company-wide sales for Molson Coors fell 2% to $1.17 billion and missed average analyst estimates of $1.21 billion in a Thomson Reuters poll, non-GAAP earnings of $1.45 a share topped the Street’s view by six pennies.
Underlying after-tax earnings for the Denver-based brewer were up 7.7% year-over-year, driven by improved performance across its U.S., European and other international businesses, as well as a lower tax rate.
However, the company was disappointed with the market demand, particularly in Canada which helped to trigger a close-to-1% decline in worldwide beer volumes, and said it will continue to expand into pricier above-premium beverage categories.
In a statement, Molson Coors said the weak customer demand was expected but that it will continue to invest in core brands to innovate its pipeline and focus on its owned above-premium brand portfolio, which has grown at a double-digit rate globally.
In its U.S.-based MillerCoors group, a 2.9% increase to $2.05 billion in total third-quarter revenues helped lift net income to $353 million from $310 million a year ago.
Excluding special items, profits at MillerCoors were up 11.7% to $363.8 million as domestic revenue per barrel jumped by 4.1% -- the highest since 2009.
"Led by Redd’s, Leinenkugel’s and Blue Moon, our strategy to grow share in the high-margin and fast-growing above premium space is driving excellent sales mix," said MillerCoors CEO Tom Long.
Meanwhile, Molson Coors said it continued to cut costs through streamlining and used savings to pay down nearly $282 million in debt during the quarter.
It continues to struggle with its premium light brands, but said it will work on fixing the category as it continues through its overhaul.
Investors cheered the optimism, sending shares of the brewing giant up about 1.5% to $54.80 in recent trade. The shares are up about 28% on the year.