Denver, Colo.- Molson Coors Brewing company (NYSE:TAP) reported 2nd quarter 2009 earnings of $1.11 per share on August 3, 2009, which beat the $0.97 consensus of the analysts covering the company. It goes to show you when things in the economy start getting better the first thing we buy is cheap American Beer. Molson Coors reported that net income increased 136.3% from a year ago.
Molson Coors is a holding company. The company’s operating subsidiaries include Molson Canada, Miller Coors Brewing Company and a 50% joint venture with Modelo Molson Imports.
This quarters earning performance was driven by increased beer pricing and substantial cost reduction across the company. Can we say job cuts? Yes, for the quarter, marketing, general and administrative cost decreased by 10.8%. Although workers at Coors may have been laid off at least their severance pay includes a weekly 18 pack.
Not all is sunny for the happy beer makers though. Like most other companies that export out of the United States there will continue to be unfavorable currency movements and cost inflation. It also seems like the worldwide demand for Coors is falling, perhaps because the cold activated cans scare the international consumer.
Almost every English beer is known to be far better than a Coors light. Brits still made room in their beer bellies for a good old American Coors. The U.K. business reported underlying pretax income of $36.8 million in the second quarter, an increase of $15.3 million, or 70.1% versus the same quarter form last year.
Peter Swimburn, President & CEO said “Our company is off to a solid start in the first half of this year, reflecting the benefit of our strong brands strategic initiative and cost reduction programs.”
Molson Coors stock was up 5% the day they released their earnings perhaps because investors saw that the company’s strengths can be seen in multiple areas. (TAP) has shown an increase in net income, good cash flow from operations, expanding profit margins, growth in earnings per share and largely solid financial positions with reasonable debt levels by most measures. Although the fundamentals may seem positive, they don’t always reflect the stock’s actions, which has recently been sub-par.