Molson Coors 3Q Profit Rises 37 Pct On Price Hikes

EMILY FREDRIX

MILWAUKEE (AP) — Consumers bought less beer made by Molson Coors in its third quarter, but profit rose 37 percent because of price increases and cost savings from the company's joint venture in the U.S.

Molson Coors said it raised prices across its major markets but discounted some prices to compete, which some analysts took as a sign that the higher prices might not be sticking. It also credited better cost controls for the increase in profit.

Despite the profit boost, shares tumbled Wednesday, with some analysts citing concerns about consumers spurning beer in the wake of price hikes. Others said a tax gain that helped the company beat estimates in the quarter was not likely to be repeated.

Shares fell $3.55, or 7.2 percent, to $45.85 on heavy volume late Wednesday.

The worldwide volume of beer sold slipped 2.9 percent in the quarter, reflecting the continuing trend of consumers holding back on their spending amid the recession — and in the face of price hikes by brewers. This has led to volume drops for key Molson Coors markets like Canada and Britain.