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Coors Stumbles on Earnings Report

Shares drop 7.3% in early trading amid lower-than-expected earnings.

Shares of



were staggering after the brewer posted disappointing fourth-quarter results.

The company reported net income $20.2 million, or 55 cents a share, a 27% increase from the year-ago period, but well below the consensus estimate of 75 cents a share, according to Thomson Financial/First Call.

The company's acquisition of European brewers Carling and Interbrew for $1.7 billion last February was included in the results, and helped boost overall sales and volume numbers. Net sales rose 75.7% to $981.1 million in the fourth quarter. For full-year 2002, the company earned $4.42 a share on net income of $161.7 million.

Sales in the Americas, which account for more than 80% of total revenue, fell 0.9% in 2002 to $2.4 billion. Weak retail sales trends and increased distribution costs were cited as reasons for the earnings shortfall.

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Shares of Coors were down $4.33, or 7.3%, to $55.10 in early trading.

Chairman Peter Coors said "2002 was a transformational year for Coors." He added, "We completed the first major acquisition in our history. Our goal is to build on our investments and grow both our U.S. and U.K. volume faster than the industry."

Analysts are projecting overall industry volume growth of 1% to 1.5% in 2003.

Mark Scott, a beverage industry analyst with New York-based J.T. Analytics, said, "Coors may have trouble building market share in the U.S., but the European market provides a nice platform for growth."

On Wednesday


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reported earnings of $269 million, or 32 cents a share, in the fourth quarter, up from $228 million, or 26 cents a share, a year earlier. The numbers were in line with consensus estimates from Thomson/First Call. The company's shares were down $1.05, or 2.18%, at $47.10 in early trading.