Molson Coors Brewing Co. (TAP) is scheduled to announce its first quarter 2011 results on May 3, 2011. Currently, the Zacks Consensus Estimate is 44 cents per share and sales estimate is $698 million.

Fourth Quarter Overview

Molson Coors registered fourth-quarter earnings of 66 cents a share, which was below the Zacks Consensus Estimate of 68 cents.

Quarterly total revenues were $1.998 billion compared with $1.996 billion in the prior-year quarter. However, net revenues excluding excise taxes increased to $1.720 billion in the quarter from $1.712 billion in the prior-year quarter.

Revenue per barrel revealed a positive growth in the fourth quarter, driven by domestic net revenue per barrel, sales growth of 1.7 percent, attributable to pricing and favorable mix.

Overall beer volumes slipped 1.9% year over year to 11.9 million hectoliters. During the reported quarter, cost per barrel increased 1.8% due to the acquisition of Western Beverage in Denver.

During the quarter, volumes at the Canada segment remained flat year over year.

First-Quarter 2011 Zacks Consensus

Analysts covered by Zacks expect Peet’s to post first-quarter 2011 earnings of 44 cents a share. The current Zacks Consensus climbed up by 18.9% from the year ago period and ranges within a low of 40 cents to a high of 52.

Magnitude of Estimate Revisions

The first quarter estimates moved down a penny in the last thirty days as one of the analyst revised its estimate. The reason for the downgrade could be the appointment of a new CEO as well as declining sales of Miller Coors which is jointly owned by Molson Coors and SABMiller Plc.

Mixed Earnings Surprise History

With respect to earnings surprises, Molson Coors has missed the Zacks Consensus Estimate by an average 0.35% over the last four quarters, ranging from a negative 17.78% to a positive 14.29%.

Recommendation

We remain encouraged by the restructuring initiatives taken by the company to reduce overhead costs and generate profitability. The initiatives include closure of underperforming breweries and triggering efficiency in finance, administration and human resource activities.

However, the seasonal nature of its business of Molson Coors and increased competition from Anheuser-Busch InBev (BUD) casts some shadow of fear.

Currently, Molson Coors has a Zacks #3 Rank implying a short-term Hold recommendation.

 
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