MillerCoors 1Q Earnings Up 51% On Price Increases

   DOW JONES NEWSWIRES 
 

MillerCoors reported a 51% jump in first-quarter earnings on a pro-forma basis, with the Miller Genuine Draft brand reporting its first volume growth in a decade.

The laggard for the joint venture - created mid-2008 to combine the U.S. operations of Molson Coors Brewing Co. (TAP) and SABMiller PLC (SAB.JO) - continued to be Miller Lite, with sales to retailers falling by the mid-single digits on a percentage basis. But the decline was smaller than the fourth quarter.

Meanwhile, MillerCoors continues to achieve cost savings faster than planned - $50.1 million in the quarter alone. That matches the $50 million planned for the first year of the venture, which began July 1. As it said in February, MillerCoors plans $128 million in savings by June 30; the total was $78.4 million as of March 31.

Assuming the venture was in place a year ago, MillerCoors' profit rose to $206 million from $136.6 million a year earlier. Net sales increased 3.8% to $1.72 billion amid price hikes, helping push gross margin up to 38.8% from 38.5%.

Domestic sales to retailers rose 0.4%, with growth at five of the company's six priority brands nearly offset by weakness at Milwaukee's Best. Domestic sales to wholesalers dropped 1%. To help Miller Lite, a new marketing campaign was launched in late March.

Molson Coors will release its first-quarter results later Tuesday morning.

-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136; [e-mail]