MILWAUKEE (AP) -- Brewer Molson Coors said Wednesday its third-quarter profit rose 37 percent as consumers bought less of the company's beer but paid higher prices for it.
Molson Coors said it generally raised prices across its major markets but discounted some prices to compete. It also credited better cost controls for the increase in profit.
The Denver-based maker of Coors Light said it earned $235.3 million, or $1.26 a share, in the three months that ended in September. Net sales at Molson Coors Brewing Co. fell 7.3 percent to $853.7 million in the quarter.
On an adjusted basis, the company earned $1.14 a share.
Analysts predicted the company would earn 98 cents a share on revenue of $837 million. Those estimates typically exclude one-time charges. Shares fell $1.68, or 3.4 percent, to $47.72 in morning trading Wednesday.
Worldwide the volume of beer sold fell 2.9 percent.
Consumer habits have shifted in at least the past year due to the recession — leading to volume drops for key Molson Coors markets like Canada and Britain, both outpacing industry trends there in the third quarter.
Canada's sales volume fell 1.8 percent and while volume in Britain, where the company has market leader Carling, dropped 6.3 percent. Molson Coors has been focusing on products in Britain where it can make more money, and shedding less profitable ones.
But even facing declining volumes, Molson Coors and other major brewers have been raising prices, saying they must cover their rising costs for key ingredients used to make and transport their beer.
In the U.S., where the company makes and markets its beers with former rival SABMiller's U.S. unit, net revenue per barrel increased 3.7 percent, driven by price increases the company took last fall and reductions in discounting. Sales to retailers there dropped 1.3 percent.
Profits are rising because the company is benefiting from the price increases and cost controls within its business. It recognized some $31 million in savings in the third quarter due to the MillerCoors joint venture with SABMiller's U.S. unit, which makes brands like Miller Lite. The pairing, which generated $73 million in cost savings in the third quarter, is expected to generate some $500 million in savings in three years. The two sides joined up in the summer of 2008 to better compete against industry leader Anheuser-Busch, which later sold itself to Belgian-based InBev.
The companies said MillerCOors now expects to reach $270 million in cost savings by the end of this year, beyond its original target of $225 million.
