Investor scrutiny has sent shares of Molson Coors (NYSE:TAP) down nearly 4%, even though earnings for the brewer's latest quarter rocketed upward by nearly 39%. There seems to be some apprehension about how the bottom line got a boost, but those concerns are overblown, given the rest of the encouraging numbers for the period.

Excluding discontinued operations and one-time charges, earnings checked in at $1.94 a share for the second quarter. The company also gained market share and increased volume in the U.S. and Canada, its two biggest markets. In the United States, sales volume increased 3.1%. North of the border, it expanded by 4%, as the company says its Canadian market share grew for the first time in almost four years. That's an important improvement, since Canada is a large market for Molson and brings in a higher margin than the States. The Canada Day weekend fell within this quarter, but it didn't account for the entire increase -- there was some genuine growth involved.

The bottom line got help from a lower tax rate, and that seems to have raised some hackles. But the company's underlying performance was strong, as the volume numbers indicate. It also realized the benefits from merger synergies and cost reduction, with savings totaling $78 million for the year. Gross margins for the quarter improved by more than 40 basis points, to 42.3%, and operating margins (excluding special items) expanded almost 150 basis points, to 15.1%. That's despite increased costs for commodities and energy.

Performance in Europe was weak, with volumes down 7.5%. But that's a smaller proportion of the company's business -- Europe accounts for just 14% of total pre-tax income. In addition, the World Cup tournament was happening during the comparable quarter in 2006, and its absence this time around explains part of the decline.

Molson is starting to realize the benefits of cost savings. The improving trend in Canada is encouraging, especially since Anheuser-Busch (NYSE:BUD), which controls almost 50% of the U.S. beer market, doesn't have as large a footprint there. Molson is sponsoring more music and sporting events in Canada to increase its name recognition, and it's working. Investors should continue celebrating. Beer and football, anyone?

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Fool contributor Larry Rothman is happy to receive feedback, and he promises to read it when he's not being wrestled by his three children. He doesn't have any positions in the companies mentioned. The Fool's disclosure policy says, "Eh?"