Although commodity cost pressures continued, Molson Coors Brewing Company (NYSE: TAP) saw its quarterly earnings climb 51% compared to a year ago. Net income excluding special items rose 46% to $216.4 million, far better than the pro forma profit of $136.6 million a year ago.
According to the brewery, five of its six focus brands saw sales to retailers increase. The lone declining brand was Miller Lite, which decreased in the mid-single digits. Coors Light saw its sales to retailers increase in the low single digits, Keystone Light saw a double-digit increase, Miller High Life saw a mid-single-digit increase, and (my wife's favorite beer) Blue Moon helped drive TAP's craft and import portfolio higher. Miller Genuine Draft saw sales to retailers increase after a decade of drops thanks to growth from MGD 64. TAP's total sales increased 3% thanks to pricing strength that offset a 2% drop in volumes. TAP expects to achieve $238 million in synergies by the end of 2009, which is higher than its original forecast of $225 million.
Blogger Paul Kedrosky posted a fascinating Bloomberg chart showing that alcohol consumption in the U.S. has started to decline. He opines people feel so poor that they have cut back on booze -- which casts aspersions on the defensive status of booze stocks. Piqqem Sentiment on Molson (NYSE: TAP), considered the best of the brewery companies, is modestly positive with rising sentiment.
It's about that time again: Pepsi vs. Coke. No, not another taste test or another Battle of the Brands. It's time for the next quarterly results from these two soft drink titans.
Analysts surveyed by Thomson Reuters anticipate that PepsiCo Inc. (NYSE: PEP), global beverage and snack food giant, will report fourth-quarter earnings this week that are 9.1% higher that a year ago, or $0.88 per share. Revenue is expected to total $12.8 billion, which is 3.9% higher than last year. For the full year, the profit is expected to be $3.67 per share on revenue of $43.4 billion, up from $3.38 per share on $39.5 billion in 2007. PepsiCo's earnings met or beat estimates in four of the past five quarters, but missed by only two cents per share in the third quarter. The consensus recommendation of analysts remains to buy PEP. The share price fell to a 52-week low in January and is now 24.4% lower than it was a year ago. During the fourth quarter, PepsiCo declared a $0.42 per share quarterly dividend, agreed to acquire a Spitz International, and announced investments in China and Mexico.
Coca-Cola (NYSE: KO) closed at $43.29. KO is scheduled to report Q4 EPS on February 12. KO February option implied volatility of 36 is near its 26-week average of 34, according to Track Data, suggesting non-directional price movement.
PepsiCo (NYSE: PEP) closed at $50.44. PEP is scheduled to report Q4 EPS in early February. PEP February option implied volatility of 35 is near its 26-week average of 33, according to Track Data, suggesting non-directional price movement.
Hansen Natural (NASDAQ: HANS) closed at $33.33. HANS is expected to report Q4 EPS in late February. HANS February option implied volatility is at 61, March is at 67; below its 26-week average of 72, according to Track Data, suggesting less price movement.
Molson Coors (NYSE: TAP) closed at $42.93. TAP is scheduled to report Q4 EPS on February 10. February option implied volatility of 42 is near its 26-week average of 39, according to Track Data, suggesting non-directional price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
With a turn of the calendar page, we drift into the middle portion of the current quarter, but the earnings season rolls on. Among the many companies scheduled to report quarterly results this coming week are Time Warner Inc. (NYSE: TWX), Cisco Systems Inc. (NASDAQ: CSCO), News Corp. (NYSE: NWS), and Whole Foods Market International (NASDAQ: WFMI). Let's take a look at which companies Wall Street analysts are expecting to be among the top earnings gainers and decliners this week.
Analysts surveyed by Thomson Financial expect the following to report strong earnings growth when compared to the same period of the previous year.
When I heard that the CEO of Miller Brewing Co. said Thursday he sees a trend of consumers buying cheaper beers, I was wondering whether consumers might also be switching not just from more expensive beers to cheaper ones, but from more expensive alcoholic drinks to beer, which tends to be cheaper.
Unfortunately for Miller, for which its parent SABMiller PLC reported earnings Thursday, so far the increase in sales of more economic beers has been at the expense of the more expensive ones. So my theory isn't much of one after all. I guess that food and gas still have a higher priority than beer, and we all know how much the price of these have risen lately.
Denver-based Molson Coors, one of the world's largest brewers, said net income for the quarter that ended March 30 totaled $37.1 million, or 20 cents per share, compared with $4.4 million, or 3 cents per share, in the year-ago quarter. Excluding a charge related to a joint venture, the company earned 32 cents per share. Net sales after excise taxes rose 10% to $1.36 billion. Analysts polled by Thomson Financial predicted a profit of 28 cents on net sales of $1.31 billion.
Molson Coors shares rose $3.94, or 7.4%, to $57.10 in afternoon trading after rising to a 52-week high of $57.74 earlier in the day.
Las Vegas-based MGM Mirage said earnings fell 30% to $118.3 million, or 40 cents per share, compared with the same quarter a year ago. Revenue for the world's second-largest casino company slipped 3% to $1.88 billion, and fell short of expectations of analysts surveyed by Thomson Financial. They had forecast net income of 43 cents per share on revenue of $1.9 billion.
MGM shares rose 6.6%, or $3.23, to $51.85 in trading Tuesday, but fell to $51.60 in after-hours trading.
While these results may suggest that consumers are spending their increasingly scarce entertainment dollars closer to home, its worth noting that Walt Disney Co. (NYSE: DIS) Tuesday reported a 22% rise in its Q2 net profit.
Day one of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Management Advisory Committees meeting: Purdue Pharma's NDA for Oxycontin.
Anadarko Petroleum (NYSE:APC) to report Q1 earnings; conference call Tuesday at 10:00am.
Tuesday, May 6
Day two of the two-day FDA Anesthetic/Life Support Drugs & Drug Safety/Risk Mgmt Advisory Committees meeting: Cephalon's (NASDAQ:CEPH) sNDA for Fentora.
Molson Coors (NYSE:TAP) to report Q1 earnings; conference call at 12:00pm.
MOST NOTEWORTHY: Cardionet, Molson Coors and TIM Participacoes were today's noteworthy initiations:
Cardionet (NASDAQ: BEAT) initiated with an Overweight, target $29 at Thomas Weisel, who believes Cardionet is well positioned for future growth in the ambulatory monitoring market.
Molson Coors also reported that sales rose 5% and that it garnered additional savings from its 2005 merger with Adolph Coors Co. The company also credited a tax benefit and favorable exchange rates for the good results.
For the quarter that ended December 30, net income totaled $173.2 million, or 95 cents per share, compared with $99.2 million, or 57 cents a share, in the year-ago quarter. Excluding special items, net income was 73 cents per share, beating an estimate of 65 cents a share from analysts surveyed by Thomson Financial.
Revenue grew in the quarter to $1.6 billion, slightly higher than analyst expectations of $1.55 billion. For the year, revenue totaled $6.2 billion, up from $5.8 billion in 2006. Full year net income totaled $497.2 million, or $2.74 per share, up from $361 million, or $2.08 a share in the previous year.
Molson Coors shares rose almost 10% today, to $49.66.
In the competitive brewing business, sometimes it's just hard to play nice. Over the weekend, Miller Brewing Co. -- a subsidiary of SAB Miller -- launched what appears to be a potential salvo in a ramped-up version of the "beer wars" of yesteryear.
A new commercial for Miller Lite, which debuted during football games and NASCAR events, uses the iconic Dalmatian-and-Clydesdale image -- used for decades by Anheuser-Busch (NYSE: BUD) -- to pay tribute to its own number-two product. The Clydesdale-drawn wagon features a sign advertising "Miller Lite. Half the carbs of Bud Light." At the end of the commercial, the dog exits the wagon for a Miller truck, which speeds away.
BUD advertising officials were quick to respond, taking out a full-page-ad in yesterday's USA Today, imploring Miller to "keep up the bad work." Launching back, Miller representatives revealed plans to continue hammering home the facts that Miller Lite has "fewer carbs and more taste."
With earnings report rolling out one after another, there's hardly time to pause to enjoy a burger and a beer. Among companies reporting next week are Burger King Holdings Inc. (NYSE: BKC) and Molson Coors Brewing Co. (NYSE: TAP), and here are a quickie earnings previews for them.
Burger King has beat Wall Street earnings estimates for the past four quarters. When it reported fourth quarter 2007 results back in August, earnings were 29 cents per share, beating Wall Street estimates by two cents, and 11cents more than in the same period of the previous year. For the full year, earnings were $1.11 per share, again beating expectations by a pair of pennies. For the current quarter, analysts surveyed by Thomson Financial are expecting 33 cents per share.
The most recent analysts' consensus recommendation is to buy BKC, and has been for the past year. The share price has been climbing since the slump after excitement of the IPO wore off, and it reached a 52-week high of $27.73 at the close on Friday.
For news about Burger King and its rivals that could influence Burger King's results, check out BloggingStocks' Burger King coverage.
MOST NOTEWORTHY: Abbott Labs, Barclays, SanDisk, Mission West Properties and Texas Instruments were today's noteworthy downgrades:
Wachovia downgraded shares of Abbott Labs (NYSE: ABT) to Market Perform from Outperform reflect several challenges to the company's key franchises. In particular, Wachovia cites the potential delay of the drug-eluting stent Xience launch in the U.S. and decelerating growth of Humira.
ABN Amro downgraded shares of Barclays (NYSE: BCS) to Hold from Buy to reflect the capital markets, lower UK bank non-interest income and higher bad debts.
Oppenheimer downgraded shares of SanDisk Corporation (NASDAQ: SNDK) to Neutral from Buy as they expect many of the advantages that drove shares to unwind in Q4 and into 1H08.
Mission West Properties (NYSE: MSW) was downgraded to Hold from Buy at Stifel, as they now believe the possibility of a sale is 50%/50% and could be pushed back to 1H08.
Think Equity downgraded shares of Texas Instruments (NYSE: TXN) to Source of Funds from Accumulate as they believe competition could hinder Q4 and 2008 growth for wireless.
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Blogger Paul Kedrosky posted a fascinating Bloomberg chart showing that 
It's about that time again: Pepsi vs. Coke. No, not another taste test or another 
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Ray of light: U.S. temp worker hiring increased by 34k in October
Closing Bell: Bulls gutting bears (ATVI, EWBC, GE, JASO, ENZN, MCD)
Goldman Sachs CEO Lloyd Blankfein pulls a Jeff Skilling in an interview
