Molson Coors (NYSE:TAP) counts itself as the second largest brewer in the U.S. and Canada. As a result of its geographic exposure and tough industry conditions, organic sales growth has been hard to come by. A recent acquisition should help move the top-line needle slightly, while other corporate moves could result in slightly higher profit growth over time.

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First Quarter Recap
Net sales growth was minimal at 0.1% as total sales reached $691.4 million. Net sales rose 2.2% to $402.3 million in Canada, fell 4.1% in the U.K. to $263.4 million and jumped 30% to $28.1 million in other international markets. U.S. sales advanced 3% to $2 billion, but aren't reflected in Molson Coor's sales. Instead, it reports results under the equity method of the business, which is known as MillerCoors and jointly owned with SAB Miller. Equity income jumped 17.5% in MillerCoors to $118.9 million. Molson owns 42% of the venture.

SEE: How Buybacks Warp The Price-To-Book Ratio

MillerCoors therefore accounted for the vast majority of Molson's operating income of $121.8 million, which ended up falling 3.3% as the other units were barely profitable on their own. Reported net income fell 4.1% to $79.5 million, but share buybacks kept earnings flat at 44 cents per diluted share.

Outlook and Valuation
Analysts project minimal sales growth of 0.9% for all of 2012 and total sales of nearly $3.5 billion. The consensus profit estimate currently stands at $3.71 per share, with expectations for 4.3% growth in 2013 to $3.87 per share. This puts the forward earnings multiples at approximately 10.8 and 10.3, respectively.

SEE: 5 Must-Have Metrics For Value Investors

The Bottom Line
Molson's existing operations aren't growing very much. This continues a trend of flat beer sales in the vast majority of developed markets across the world. Rivals including Miller and Anheuser-Busch InBev (NYSE:BUD) are in a similar predicament and continue to struggle against the growing share of microbrews, as well as spirit growth from the likes of Beam (NYSE:BEAM) and Brown-Forman (NYSE:BF.A) (NYSE:BF.B).

SEE: Selecting A Second-Tier Company

Molson is looking to acquisitions to grow and on April 3 announced its intent to snap up Central European brewer StarBev and its $953 million in annual sales. M&A activity could help sales grow modestly over time while cost cutting and share buybacks could help profits grow at a slightly higher faster rate over time. Combined with a current dividend yield of 3.3%, investors should be able to drink in modest total shareholder gains over time.

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