(Reuters) - Molson Coors Brewing Co TAP.N posted its fourth straight quarter of weaker-than-expected earnings on Wednesday as the struggling economy had an effect on beer sales, sending its shares down more than 3 percent.
The maker of Coors Light, Molson Canadian and Blue Moon beers said net income fell to $197.4 million, or $1.06 per share in the third quarter, from $256.1 million, or $1.37 per share, a year earlier.
Excluding items, earnings were $1.14 per share. On that basis, analysts on average were expecting $1.25, according to Thomson Reuters I/B/E/S.
Net sales rose to $954.4 million from $875.0 million.
Worldwide beer volume slid 0.8 percent to 13.1 million hectoliters.
“We continued to face high unemployment among core beer consumers, lower volume and significant commodity inflation,” Molson Coors Chief Executive Officer Peter Swinburn said.
The company also incurred higher marketing expenses in the United States, he added, while demand in bars and restaurants in Britain was unexpectedly weak.
Earlier on Wednesday, MillerCoors, the combined U.S. operations of SABMiller Plc SAB.L and Molson Coors, which is the second-largest brewer in the United States, said its third-quarter net income fell 14 percent while sales fell 2.5 percent.
Stifel Nicolaus analyst Mark Swartzberg said Molson’s weak third-quarter profit overstated its challenges, which include a concentration in developed markets like the United States, Canada and Britain and having to compete with much-larger rivals including SABMiller and Anheuser-Busch InBev (ABI.BR).
Swartzberg, who has a “hold” rating on Molson shares, said he still recommends investors stay on the sidelines, saying its valuation is broadly in line with the company’s long-term competitive position.
“Our view is for Molson Coors as a going-concern, and we believe any sale of the company or structural event (such as the purchase of SABMiller’s stake in the U.S. joint venture) is not imminent,” Swartzberg said.
Molson shares were down $1.51, or 3.7 percent, at $38.85 on the New York Stock Exchange.
Reporting by Martinne Geller in New York; Editing by Lisa Von Ahn and Maureen Bavdek