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MILWAUKEE - Molson Coors Brewing Co. is expected to report earnings for the third quarter on Wednesday before the market opens. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: No matter how difficult the economy may be, people are still drinking beers like Coors Light and Blue Moon, both made by Denver-based Molson Coors.
But consumer habits have shifted in at least the past year due to the recession — leading to volume drops for key Molson Coors markets like Canada.
And now that the economic pressures seem to be easing those trends are improving, according to industry and analyst reports. But there are still other issues — such as competition in Canada, which can lead to price discounting — that the company is dealing with.
The U.S. business has not been as hurt as that in Canada. The company has the benefit in the U.S. of its MillerCoors joint venture with SABMiller's U.S. unit, which is expected to generate some $500 million in savings in three years. The two sides have joined up to better compete against industry leader Anheuser-Busch, which sold itself late last year to Belgian-based InBev.
BY THE NUMBERS: Analysts polled by Thomson Reuters expect earnings, excluding one-time items, of 98 cents per share on revenue of about $837 million for the quarter ended in September. Last year in the same quarter the company earned 94 cents a share.
ANALYST TAKE: Stifel Nicolaus & Co. analyst Mark Swartzberg recently boosted his earnings per share estimates by 2 cents to 96 cents, on improving shipment expectations in the U.S. and Canada. He said the industry's volume trends appeared to improve "appreciably" in September, especially with premium light trends. He also noted that Coors Light returned to growth.
WHAT'S AHEAD: Analysts will keep an eye on volume trends to see if consumers increase their beer buying and loosen up on their spending. The company is expected to continue benefiting from cost savings from MillerCoors and the decline in input costs.
STOCK PERFORMANCE: Molson Coors' shares gained about 15 percent in the quarter to finish at $48.68. Shares closed Friday at $48.97.
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