Molson Coors Brewing Co
The brewer also cited the strength of its brands, such as Coors Light and Molson Canadian, and lower incentive compensation for helping it clear the hurdles of lower beer sales, a higher tax rate, increased raw material costs and the stronger U.S. dollar.
Despite its first-quarter success, Molson said it remains cautious about the rest of the year due to uncertainty around currency exchange rates, commodity costs and beer trends.
Molson said net income rose to $75.7 million, or 41 cents per share, in the first quarter that ended March 29, up from $34.3 million, or 19 cents per share, a year earlier.
Income from continuing operations, excluding one-time items, was 53 cents per share, well above analysts' average estimate of 33 cents, according to Reuters Estimates.
Stifel Nicolaus analyst Mark Swartzberg estimated that savings from MillerCoors, the U.S. joint venture Molson formed in July 2008 with SABMiller Plc
We consider the results a validation of our Buy thesis, predicated on our belief that the MillerCoors joint venture represents at least $8 per share in unreflected value in Molson Coors shares, Swartzberg said in a research note.
Molson said net sales tumbled to $559 million from $1.36 billion in the year-earlier period, before the company formed the MillerCoors joint venture
Molson Coors' U.S. sales are now accounted for by MillerCoors, which earlier on Tuesday said first-quarter net sales rose 3.8 percent to $1.72 billion. The joint venture also said it realized some merger-related cost-savings in the first quarter that were originally scheduled for the second quarter.
By the end of 2009, MillerCoors expects to achieve $238 million in cost savings, above its forecast for $225 million. Despite the accelerated timing, the venture's ultimate goal -- to save $500 million -- is unchanged.
Molson said it sold 10.5 million hectoliters of beer in the quarter, down 2.7 percent from the year-ago period.
Molson shares were up $4.03 at $42.53 on the New York Stock Exchange in morning trade.
(Reporting by Martinne Geller, editing by Maureen Bavdek, Dave Zimmerman)