MONTREAL — Shares of Molson Coors Brewing Co. took a hit Wednesday as it missed analyst forecasts and investors worried it wasn’t fully profiting from cost savings following an acquisition that transformed it into the world’s third-largest brewer.
The company’s shares (TSX:TPX.B, NYSE:TAP) fell almost five per cent to C$124.10 in afternoon trading in Toronto and touched a 52-week low in New York.
The drop came after the brewer reported weaker U.S. sales in the first two months of the year and concerns about cost savings were ignited since no quarterly numbers were disclosed, analyst Brittany Weissman of Edward Jones said.
Molson, which reports in U.S. dollars, earned US$201.3 million or 93 cents US per diluted share for the quarter ended March 31. That compared with a profit of $162.7 million or 80 cents per share a year ago, before the $12-billion acquisition of the Miller brands and MillerCoors joint venture in the United States.
However, had the Miller assets been part of Molson Coors a year ago, earnings were down from $256.9 million or $1.19 per diluted share on a pro-forma basis.
Excluding one-time items, adjusted profits were US$274 million or US$1.26 per share, four cents below analyst forecasts according to Thomson Reuters.
“With the completion of the MillerCoors transaction late last year and the changes we’re making to enhance our organization, 2017 will be a transition year as we build a larger stronger company,” CEO Mark Hunter said in a conference call.
In Canada, Molson Coors earned $23.1 million in pre-tax profits, compared with $146.6 million a year ago when it recorded a gain from the sale of its Vancouver brewery.
However, sales grew and Molson benefited from market share gains in Quebec and the West.