London-traded brewer SABMiller, distributor of global brands like Coors Light, Miller and Pilsen, attributes its consensus-beating quarterly results to strong emerging economies.
According to the company, which trades fairly thinly in ADR form as SBMRY , demand for beer is so robust in Africa and China in particular that selective price increases are on the horizon in some markets.
Even though grain costs have receded somewhat since the price spikes of the summer, SBMRY says enhanced productivity will only "moderately" protect its margins going forward.
Overall revenue came in at $14.2 billion, up 6% and ahead of $14 billion consensus. Net earnings climbed an unexpectedly robust 19% to $47 billion, well above estimates.
Africa, China and a weak dollar were the primary factors in the company's strong results, with Western Europe actually coming in "reasonably depressed" -- sales dipped 4% in the region. However, North America also performed extraordinarily well, with net profits in that region up 27%.
The global beer trade is another big theme for us and we watch these stocks carefully as primary consumer plays. Consolidation in the space is leaving fewer and fewer strong players to dominate the market, but those that survive are strong indeed.All in all, these results are a good omen for BUD .
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