Molson Coors Brewing Co revealed a disappointing set of second-quarter results yesterday, August 5, draining its share value by up to 15 percent and missing Wall Street expectations.
The brewer, which recently combined its stateside operations with those of SABMiller plc, announced that second quarter net profit dropped 56 percent to US$80.9 million, or 43 cents per share, from US$184.9 million, or US$1.12 per share, a year ago.
Rising energy and commodity costs plus a higher tax rate are being blamed.
Excluding special items, such as charges of US$103.9 million for the MillerCoors venture, Molson earned 93 cents a share, which is well below analysts' average estimate of US$1.17, according to Reuters Estimates.
Molson reported that its quarterly tax rate excluding special items was 23 percent, up from 20 percent twelve months ago. The company now expects a full-year rate of 20.4 percent, up from a previous estimate of 14.8 percent.
Commenting on the results, UBS analyst Kaumil Gajrawala said that the higher rate tax accounted for nine cents per share of the drop in second-quarter earnings. He believes that the higher full-year rate will make analysts reduce their earnings expectations.