Anheuser-Busch Posts Q1 Profit Miss

Anheuser-Busch shares fell 2.8% to close at $50.90 yesterday, their biggest drop in almost two years, after the company posted a Q1 profit miss on advertising expenses for Bud Light and imported beers. Net earnings were $517.5 million ($0.67/share) in the quarter, up 3.7% from $499.2 million ($0.64) a year ago. Net revenue rose 2.7% to $3.86 billion from $3.76 billion in the year-ago quarter. Analysts were expecting EPS of $0.69 on revenue of $3.94 billion. Marketing and administration expenses were up 8.1% to $665.7 million in a bid to keep consumers away from rival Miller Lite. Advertising costs were also increased by marketing for InBev NV's European brands Bass and Beck's, for which Anheuser-Busch took over distribution in February. Sales were up 2.7% to $3.86 billion for Q1 from $3.76 billion a year earlier. The company's U.S. market share dropped to 50.2% from 50.9% a year ago. Shipments to U.S. wholesalers rose a scant 0.5% from a year ago, but international shipments to wholesalers were up 8.7% to 5.2 million barrels, primarily on sales to China and Canada.

Sources: Conference call transcripts: Q1 2007, Press release, MarketWatch, MoneyCentral, Bloomberg
Commentary: From Vice to Virtue: Study Indicates Sin Stocks Outperform the Market • Outlooks for Select S&P Dividend Aristocrats • Anheuser Busch Sets Up Bud.TV For Internet Reach
Stocks/ETFs to watch: Anheuser-Busch Companies, Inc. (BUD). Competitors: Molson Coors Brewing Company (TAP). ETFs: Consumer Staples Select Sector SPDR (XLP), Vanguard Consumer Staples ETF (VDC), PowerShares Dynamic Consumer Staples (PSL)

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.