UPDATE: Molson Coors 3Q Net Up 8.8% On Higher Pricing, Revenue Growth

Molson Coors Brewing Co.'s (TAP) third-quarter profit climbed 8.8% on higher prices and cost savings, more than offsetting a decline in worldwide beer volume.

Separately, the company said it has begun to unwind certain positions it had built through swaps that gave it exposure to the stock of Australia's Foster's Group (FGL.AU). Molson Coors first disclosed the Foster's swap, which gave it exposure to nearly 5% of Foster's common stock, in 2008. At that time the move raised speculation that Molson Coors might be interested in some kind of a strategic deal with the Australian alcohol company. On Wednesday, Molson Coors executives said on a conference call that the company had decided that it no longer wanted exposure to the Foster's swap.

Molson Coors posted revenue growth for the fourth consecutive quarter from year-earlier levels, although volumes have stayed under pressure. In the latest quarter, worldwide beer volume fell 4%, driven by declines in the U.S. and the U.K.

Beer volumes in the U.S. have been tepid as consumers have cut back, but beermakers are benefiting from price increases and international growth. Beer giant Anheuser-Busch InBev N.V. (ABI.BT) Wednesday also reported a rise in third-quarter profit, as a strong performance in emerging markets offset weakness in the U.S and Europe.

Molson Coors posted a profit of $256.1 million, or $1.37 a share, up from $235.3 million, or $1.26 a share, a year earlier. Excluding discontinued operations, earnings rose to $1.38 from $1.31 as net sales increased 2.5% to $875 million.

Analysts surveyed by Thomson Reuters expected a profit of $1.13 on revenue of $877.7 million.

Gross margin widened to 47.7% from 44.6%.

Pre-tax profit from the company's U.S. business grew 34%, driven by MillerCoors LLC's results, and profit from its Canadian arm was up 16% in U.S. dollars, and grew 9.9% in local currency on volume growth and higher pricing.

Earlier Wednesday, MillerCoors--the joint venture of Molson Coors and SABMiller PLC's (SAB.JO) U.S. brewing operations--said its third-quarter profit grew 36%, driven by cost-containment and higher prices.

-By John Kell and Anjali Cordeiro, Dow Jones Newswires; 212-416-2480; [e-mail]