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NEW YORK--Molson Coors Brewing Co. posted better-than-expected earnings as a lower tax rate cushioned higher costs and heavy discounting by competitors, reported Reuters.
The stock was up 2 percent on the New York Stock Exchange.
Molson Coors posted earnings of $108.2 million, or $1.26 a share. That compares with $64.1 million, or $1.68 a share, a year earlier, according to the report.
The company, created in February when Canada's Molson and U.S.-based Coors merged, posted profits excluding special items of $129.5 million, or $1.51 per share, down 4.1 percent from 2004 on a pro forma basis, the company said.
The per-share earnings were better than analysts' expectations for Molson Coors to earn $1.23 a share, according to Reuters Estimates.
Wall Street's average estimates for Molson Coors' third-quarter earnings had been slipping with six analysts cutting their profit outlook on the brewer in the last month.
"Molson Coors' third-quarter results were driven primarily by a very favorable effective tax rate," Citigroup analyst Bonnie Herzog, who has a "sell" rating on the stock, wrote in a note released on Tuesday, reported Reuters.
Excluding items, the company's effective tax rate was 15 percent, about half of what some analysts' had expected.
The company, which makes beers including Molson Canadian and Coors Light, said in the Reuters report that net sales rose to $1.6 billion from $1.1 billion in the year-earlier quarter.
The company said the higher net income and net sales were due to the inclusion of Molson's results in the third quarter of 2005 but not in the third quarter of 2004.
"We are in the first year of the merger and there's apples and oranges comparison going on. The most important thing is to look at trends in their major markets," UBS analyst Caroline Levy, who has a "buy" rating on the stock, told Reuters. "It was pleasing to see that volumes and pricing were positive in Canada, and in the U.S. the company is outperforming the industry."
Canada segment comparable sales to retail were up 1.5 percent during the third quarter 2005 from a year earlier. Still, the numbers were lower than overall industry sales to retail growth of about 3.5 percent, according to the report.