Molson Coors Brewing Company (TAP – Free Report) reported solid third-quarter 2018 results, wherein both top and bottom lines surpassed estimates. In fact, this marked the company’s second straight quarter of positive earnings and sales surprises. Results were backed by the company’s First Choice strategy, strong and diverse brand portfolio, and improved performance in Europe and International business units as well as global brands.
Molson Coors’ underlying adjusted earnings of $1.84 per share rose about 34.3% year over year and surpassed the Zacks Consensus Estimate of $1.57. This increase is attributed to robust net sales, benefit from the resolution of a dispute with a vendor and cost savings. These factors also benefited the company’s underlying EBITDA along with its Canada, U.S. and International businesses.
Delving Deeper
Net sales rose 1.8% to $2,934.2 million, beating the Zacks Consensus Estimate of $2,895 million. The top line beat can be attributed to favorable global pricing and improved financial volumes in Europe, the United States and Canada along with favorable mix in Europe, partly negated by currency headwinds and adoption of the new revenue recognition accounting standard. On a constant-currency basis, net sales grew 2.5%.
Notably, net sales per hectoliter advanced 0.9% on a reported financial-volume basis, while it rose 0.4% on a constant-currency basis, owing to positive global pricing and favorable mix in Europe. This was partly offset by the adoption of the new revenue recognition accounting standard.
Molson Coors’ worldwide brand volume declined 1% to 25.3 million hectoliters due to soft volumes in the United States and Canada, offset by the strength in Europe and International businesses. Global priority brand volumes dipped 1.4%, while financial volumes rose 0.8% to 26.5 million hectoliters. Financial volumes grew on the back of strong volumes in Europe, the United States and Canada.
