Global brewer Molson Coors Brewing Company TAP delivered better-than-expected earnings and revenues in the first quarter of 2016, driven by beer volume growth and continued focus on cost savings, pricing and brand building. Molson Coors posted adjusted earnings of 54 cents per share in the first quarter of 2016. Earnings beat the Zacks Consensus Estimate of 43 cents by 25.6% and increased 17.4% from the prior-year earnings of 46 cents per share. Earnings grew owing to worldwide volume growth and lower cost of goods sold. These factors more than offset the negative impact from unfavorable sales mix, higher brand spending, a higher underlying tax rate and currency headwinds. Molson Coors Brewing Company - Earnings Surprise | FindTheBest Revenues and Operating Profits Net sales, including excise tax, declined 6.1% year over year to $657.2 million in the first quarter, as a result of a continued difficult economy and competitive pressure, along with significant unfavorable foreign currency. Currency had a negative impact of $43.5 million on overall sales in the quarter, which overshadowed the impact of volume growth. On a constant currency basis, sales increased 0.1% in the quarter. Net sales per hectoliters declined 8% in the first quarter, while it declined 1.9% in constant currency. While sales declined in Canada, it grew in the other two regions of Europe and International. Sales beat the Zacks Consensus Estimate of $602 million by 9.2%. Total worldwide beer volume increased 1.2% year over year to 11.6 million hectoliters with volume gain of 3.5% in Coors Light worldwide. Sales volume improved 2.1% to 5.75 million hectoliters in the first quarter of 2016. The increase in volume was due to volume gain in Europe and the U.S., partially offset by volume decline in the Canada and International region. Underlying (excluding special and other non-core items) pre-tax income improved a significant 36.3% year over year to $139 million driven by growth in the geographical segments of Canada and the U.S., offsetting the declines in Europe and the International region. Currency had a negative impact of $0.3 million in the first quarter. On a constant currency basis, underlying pre-tax income increased 36.6%. Segment Details The company operates through the following geographical segments. Canada: Molson Coors Canada net sales declined 14.5% to $268 million in the quarter due to a decline in sales volume. STRs decreased 5.2% due to the termination of the Miller brands agreement and increased competitor trade spending and pricing activities, as well as weak economic conditions in Western Canada. On a constant currency basis, segment sales decreased 5.6%. The segment’s underlying pretax income increased 20.7% to $37.3 million in the quarter driven by a temporary reduction in distribution costs, lower pension expenses, and cost savings initiatives. These factors offset the impact of lower volume, higher brand investments and currency headwinds. On a constant currency basis, underlying pretax income increased 25.2%. United States (MillerCoors): MillerCoors, a U.S. joint venture of Molson Coors Brewing Company and SABMiller plc, was launched on Jul 1, 2008. Molson Coors has a 42% economic interest in MillerCoors. MillerCoors’ underlying net income increased 22.2% to $372.1 million driven by higher net pricing, positive sales mix, timing of shipments and lower cost of goods sold. Molson Coors’ underlying U.S. segment equity income increased 22.1% to $157.9 million. Europe: It includes the UK segment combined with the results of operations in Central Europe, excluding the Central Europe global export and license business. The segment reported net sales gain of 0.2% to $358.7 million in the first quarter of 2016. On a constant currency basis, segment sales increased 4.4%, due to volume gains. However, Europe net sales per hectoliter decreased 0.5% in local currency, due to lower contract brewing volume. Excluding the impact from the termination of the Heineken brewing agreement, positive brand and geographic mix was partially offset by negative net pricing in the quarter. The segment posted an underlying pretax loss of $0.5 million, as against an income of $4.5 million in the prior-year quarter due to higher brand investments, lower net pension benefit, the termination of the Heineken contract brewing arrangement in the U.K., and unfavorable foreign currency movements, partially offset by higher sales volume and lower overhead costs. On a constant currency basis, underlying pretax income decreased 102.2%. Molson Coors International (MCI): Segment net sales improved 6.5% to $31 million in the quarter. On a constant currency basis, segment sales increased 8.6%, despite volume declines. Sales volume including royalty volume decreased 0.7%. The segment posted an underlying pretax loss of $2.3 million in the first quarter, narrower than $5.4 million loss incurred in the year-ago period, driven by favorable sales mix and lower marketing, general and administrative expenses due to the substantial restructure of the China business in 2015. On a constant currency basis, underlying pretax income increased 61.1%. Molson Coors currently has a Zacks Rank #3 (Hold). Constellation Brands Inc. STZ is a better-ranked brewer in the alcohol industry, holding a Zacks Rank #2 (Buy). Investors can also consider soft beverage stocks, PepsiCo, Inc. PEP and Coca-Cola Enterprises, Inc. CCE, both with a Zacks Rank #2. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MOLSON COORS-B (TAP): Free Stock Analysis Report COCA-COLA ENTRP (CCE): Free Stock Analysis Report PEPSICO INC (PEP): Free Stock Analysis Report CONSTELLATN BRD (STZ): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research