Anheuser-Busch (NYSE:BUD) appears to be re-establishing itself as the king of beers, as seen in its improved second-quarter results. But fellow Fool Nate Parmelee is worried that competitors such as Molson Coors (NYSE:TAP), the fifth-largest brewer out there, are fast on its trail. Do recent results at Molson Coors suggest it's capitalizing on industry malaise to steal market share from a dominant Bud?

In a nutshell, Molson Coors is working through more than just a flat marketplace for ale. Sales for the second quarter were up only 2.3%, but earnings results were more difficult to discern because the company is still digesting its acquisition of Molson and had a couple of tax benefits and other adjustments. Overall, results in Canada were strong and performance in the U.S. was respectable as volumes and sales advanced a couple of percent. Business in Europe was decent as well, but the force was not with the company overall.

Quarterly results didn't meet Wall Street's expectations, as higher energy and commodity costs dented the final earnings tally. As a result, the shares fell 7% Tuesday and are now trading about 10% off their highs over the past year.

There was no balance sheet or cash flow statement included in the press release, so Fools will have to wait for the 10-Q for those stats. Management did note that it plans on generating $300 million in cash flow for the year. Overall operating cash flow is strong at Molson Coors, but the company is also working to pay down debt and spending on its capital-intensive breweries.

Molson Coors is also busy finding synergies from the February 2005 merger in which Coors acquired Canadian-based Molson for added international clout. As a result, it's now a major player in Canada and Europe, which account for close to half of total volumes, with the U.S. at just over half. The U.S. market has not been kind to brewers, as volumes have grown less than 1% each year over the past 10 years. That's because consumers have become more image-conscious and migrated to pricier liquor brands, preferring Brown Forman's (NYSE:BFa) (NYSE:BFb) Jack Daniel's or Diageo's (NYSE:DEO) Captain Morgan's Rum, for instance. This is causing the giant beer guys to fight over stagnant market share and pursue cost efficiencies until volumes improve.

As Anheuser-Busch and Molson Coors are trading at similar earnings multiples right now, I'd probably stick with Bud. The beer industry is still struggling, but Molson Coors has the added baggage of last year's large merger, and Molson and Coors have a limited operating history as a combined entity. Both are market leaders and will benefit if and when consumer tastes shift back toward carbonated beverages, but Bud is still king as the more stable cash generator.

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The Fool has a newsletter for almost every type of investor. Anheuser-Busch was recommended in Inside Value, and Diageo is anIncome Investorpick.

Fool contributor Ryan Fuhrmann is long shares of Diageo but has no financial interest in any other company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.