MillerCoors Collects 37 Percent Profit Jump
DENVER (AP) — MillerCoors, a U.S. joint venture between Molson Coors Brewing Co. and SABMiller PLC, said Wednesday that its third-quarter profit climbed on cost-control efforts as well as the strength of beer brands like MGD 64.
The maker of Blue Moon and Miller Genuine Draft said its earnings rose 37 percent to $229.7 million compared with a pro-forma profit of $168.2 million a year ago.
Excluding pension related charges and other items, profit increased to $244.4 million from $190.8 million.
Revenue grew 3 percent to $2.01 billion from $1.95 billion, partly on MGD 64's strength, while sales of mainstay Miller Lite continued to soften.
MillerCoors said its pricing remained solid, with domestic net revenue per barrel up 3.7 percent when removing contract brewing and company-owned distributor sales. The company credited the improved performance to price increases implemented in the fall of 2008 and less discounting.
MillerCoors, which is based in Denver, was also helped by its cost-control efforts, which included a 4.5 percent decline in marketing, general and administrative costs.
The pairing of Molson Coors and SABMiller is also saving money by operating together and eliminating overlapping functions, a move it undertook starting in July 2008 to better compete against industry leader Anheuser-Busch, which sold itself last year to Belgian-based InBev.
MillerCoors said it saved $73 million in the third quarter in part by getting rid of duplicate and transitional positions and continuing to shift production of Coors and Miller brands to the larger MillerCoors brewery network.
But MillerCoors still has to deal with a tough economy that is making consumers limit their drinking and trips out to bars. Flagship Miller Lite — which is highly dependent on restaurant and bar sales — has been hurting due to the stay-at-home trend. However, its MGD 64 sales are up, as are those for Blue Moon and Peroni Nastro Azzurro.
Consumers also appear to be favoring less expensive brands like Keystone Light and Miller High Life during the recession, while pricier brands like Killian's Irish Red and Miller Chill experience lower sales.
CEO Leo Kiely said in a statement that the company has recognized the advantages of having a diversified product line "that offers consumers choice and variety in all segments."