NEW YORK (
) -- Shares of
The Boston Beer Company
changed hands at rapid speed Wednesday, more than tripling the average trading volume, after the brewer of Sam Adams brand beers missed top-line expectations in its recent quarter.
"We consider the results and underlying quality evidence of stable-to-improving trends in each of the company's main markets," noted Stifel Nicolaus analyst Mark Swartzberg, adding that he expects "Street estimates for 2010 and 2011, which declined in 2009 and early 2010, to move approximately 3%-5% higher on increased revenue and margin estimates."
Boston Beer said late Tuesday it booked sales of $129.6 million in the second quarter. Though the figure represented a 9.7% jump from year-earlier revenues of $118.1 million, Wall Street analysts had, on average, forecast sales of $130.8 million.
The miss led investors to bid Boston Beer down 0.2% Wednesday. More than 616,000 shares were in play, compared with their three-month trailing average volume of 171,000.
Shares of industry rival
Molson Coors Brewing
experienced lighter-than-normal trading volume a day after the maker of Coors Light and Molson Canadian
, driven by rising revenues and the favorable impact of currency exchange. Shares edged up 0.3% Wednesday afternoon.
"Molson Coors is known for earnings volatility versus Street estimates, and one beat does not a trend make," noted Swartzberg. "But we believe estimates are likely to go higher on this result and view the North America trends as a sign of stable-to-improving industry conditions."
The Boston-based brewer raised its 2010 earnings outlook by 20 cents per share to a range of $2.85 to $3.15. Analysts expect full-year earnings of $2.86 per share.
Analysts expect Molson Coors to earn $3.39 per share for the year.
Despite its sales miss, Boston Beer did top earnings expectations with quarterly profits of $1.13 per share, or $16.3 million, up from 83 cents per share, or $11.9 million, in the year-earlier period, driven primarily by higher core products shipment volume.
Better-than-expected gross margin and synergies for the company's U.S. joint venture, MillerCoors, also helped boost earnings, Swartzberg added.
Boston Beer CEO Martin Roper said the company will consider increasing its brand advertising in 2011, which could result in slower earnings growth.
Boston Beer enjoyed a 9% increase in core shipment volume last quarter, thanks to double-digit increases in Twisted Tea and Samuel Adams Seasonals. Molson Coors said global beer volume fell 0.7% in the recent quarter, offset partially by a 2.6% volume increase in Canada and 0.7% uptick in the U.K. market which benefits from good weather and the FIFA World Cup soccer tournament.
Swartzberg maintained a buy rating on Boston Beer shares, but cautioned that "protracted U.S. volume weakness is the single largest risk we see to our recommendation."
Chairman Jim Koch said Boston Beer continues "to see expanded distribution of domestic specialty brands and local craft brands, which is increasing competition in the category," adding that "we are happy with the health of our brand portfolio and remain positive about the future of craft beer."
Craft Brewers Alliance
( HOOK), a collection of regional breweries including Redhook, Widmer and Goose Island, announced Tuesday that Kona Brewing, a craft brewer based in Hawaii, will become its wholly-owned subsidiary for the purchase price of $13.9 million.
reported last month that beer titans
and Molson Coors have been losing market share to smaller brewers like those operated by Craft Brewers Alliance. During 2009, craft beer shipments increased 7.9%, up from the previous annual growth rate of 5.9%, pointing to an accelerating trend. As a percentage of total beer shipped, Craft crept up from 4% to 4.3% in 2009.
SABMiller and Molson Coors contributed their American operations to a joint venture called MillerCoors in 2008.
MillerCoors said recently its net quarterly income rose by nearly 20%.
Anheuser-Busch Inbev, itself a merged entity of U.S.-based Anheuser-Busch and Belgian brewer InBev, recently lost a trademark battle with Czech brewer
, which already controlled the Budweiser trademark in certain markets including Germany and Austria.
-- Reported by Miriam Marcus Reimer from New York.
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