Anheuser-Busch Beats By a Penny, Reaffirms Outlook

Wednesday Anheuser-Busch Companies reported it beat by a penny in its recently ended quarter, on strong domestic beer sales. Shares rose 0.96% in composite trading. EPS was $0.88 on net sales of $4.52 billion; analysts were looking for $0.87 on net sales of $4.44 billion. The company also announced a nearly 12% boost to its quarterly dividend, from $0.295 to $0.33. Not including $0.01 per share from the sale of a Spanish amusement park, the company's EPS was in-line. Bud plans to raise prices, and offer less discounts for the rest of the year as a result of what CFO W. Randolph Baker termed on the conference call, a "pricing environment... that was favorable" and and outlook that "continues to be positive" (see full transcript). Anheuser-Busch's U.S. shipments to wholesalers rose 2.3%, against an increase in sales to retailers of just 0.1%, which could possibly create problems in the current quarter, as wholesalers may have to cut back on orders while they unload excess inventory to retailers. International sales rose 1.6%, as strong Canadian and Chinese sales of Bud offset weakness in the U.K. The company reiterated its long-term EPS growth target of 7%-10%, and believes its full-year 2007 EPS growth will exceed this range. Monday, a Citigroup analyst put the odds of a Anheuser-Busch merger with rival Belgian brewer InBev S.A. at 70%, saying it was the only hope the company had to raise its global profile. Anheuser-Busch became the exclusive U.S. distributor for InBev brand beers in February, including Beck's, Bass and Stella Artois.

Sources: Press Release, Bloomberg, MarketWatch, Dow Jones Newswires, AP
Commentary: Rumor or Reality: Is Anheuser-Busch A Takeover Target • Anheuser-Busch Shares Higher On Ackman Activist Target Speculation • Anheuser-Busch Jumps on Shake Out Rumors
Stocks/ETFs to watch: BUD, INBVF.PK. Competitors: TAP, STZ. ETFs: VDC, UGE, PSL
Earnings call transcripts: Anheuser-Busch Q2 2007 Earnings Call Transcript

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