What happened

Shares of Molson Coors Brewing (NYSE:TAP) plunged in early trading Tuesday after the beer giant reported Q4 earnings that featured an earnings beat (sort of) -- but also a restatement of financial results for all of 2016 and 2017.

As of noon EST, Molson Coors stock is down a good 9.5%.

Overflowing beer glass

Molson Coors' cup runneth over with bad earnings news today. Image source: Getty Images.

So what

Molson Coors was expected to post adjusted earnings of $0.78 per share in Q4 2018. The company actually reported GAAP earnings of $0.35 per share. But because Molson said its pro forma earnings came in at $0.84 per share, Wall Street is considering this an earnings beat.

Of course, while pro forma accounting can giveth, it can also taketh away. Molson Coor's Q4 GAAP sales were more than $3 billion, which should have been good enough to exceed Street projections for $2.5 billion in sales. However, the company said its adjusted sales were only $2.4 billion -- thus a sales miss.

Check out the latest Molson Coors earnings call transcript.

Now what

So is this good news? Bad news? How about "irrelevant news"? As it turns out, what really seems to be concerning investors today is the fact that, in the course of reporting its earnings for Q4 and full-year 2018, Molson Coors also advised that it has discovered "the existence of a material weakness" in its accounting:

Specifically, in connection with preparing our 2018 financial statements, [Molson] identified an error in our 2016 income tax accounting for inside and outside basis differences related to our partnership in MillerCoors which resulted in an understatement of our deferred tax liability and income tax expense, and overstatement of net income by $399.1 million as of and for the year ended December 31, 2016. This deferred tax liability required revaluation in 2017 due to the impacts of the Tax Cuts and Jobs Act which, along with other insignificant errors in the 2017 calculations related to the previously held equity interest in MillerCoors, resulted in an overstatement of our income tax expense and understatement of net income of $151.4 million for the year ended December 31, 2017, and a net cumulative understatement of our deferred tax liability of $247.7 million as of December 31, 2017.

Long story short, Molson's going to have to restate its earnings for both 2016 and 2017, which up until now had been believed to be two of its strongest earnings years of the past decade, according to data from S&P Global Market Intelligence.

At least three law firms have already announced class-action lawsuits in connection with the restatement. No wonder investors are running scared.