Anheuser-Busch, powered by Bud Light Lime, posted second-quarter earnings that beat Wall Street analyst forecasts.
A-B reported earnings of 95 cents per share, above the consensus estimate of 93 cents.
A-B’s earnings increased by 1.8 percent during the quarter. A-B attributed the performance to the launch of Bud Light Lime and stronger performance of core brands.
From the release:
"Anheuser-Busch achieved solid sales and earnings per share growth for the quarter and first half of the year," said August A. Busch IV, president and chief executive officer of the company. "U.S. beer shipments and wholesaler sales-to-retailers increased in the quarter over last year, led by the successful launch of Bud Light Lime and improved performance of other core brands. According to IRI supermarket data, Anheuser-Busch has gained 1.0 share points at the consumer level during the last four weeks. We are encouraged by the success of our marketing and selling initiatives, and are optimistic concerning the outlook for the remaining summer selling season."
A-B reported increased shipments and sales to retailers. From the release:
U.S. beer shipments-to-wholesalers increased 0.5 percent for the second quarter. Sales-to-retailers for the quarter increased 0.4 percent despite the timing of the Fourth of July holiday that adversely impacted the comparison with second quarter 2007 results. Sales-to-retailers for the second quarter plus first week of July, which eliminates the holiday timing distortion, were up 1.9 percent over the comparable period last year.
For the first six months of 2008, shipments-to-wholesalers increased 0.4 percent, and sales-to-retailers decreased 0.1 percent with import brands contributing 0.2 basis points of growth to shipments and 0.4 basis points to sales-to-retailers. The Fourth of July timing also adversely impacted year- to-date sales-to-retailers although to a lesser degree than in the quarter. Wholesaler inventories for Anheuser-Busch produced brands at the end of the second quarter were essentially level compared with inventories at the end of the second quarter 2007.
A-B described the pricing environment as "favorable" and said it would put through increases this fall. From the release:
The U.S. beer pricing environment remained favorable through the important Memorial Day and Fourth of July holidays, as expected. The company plans to implement price increases on the majority of its U.S. beer volume in September and October. These pricing initiatives will cover approximately 85 percent of the company's domestic volume and will be tailored to selected markets, brands and packages. Overall, the company expects to achieve revenue per barrel(2) growth of 4 percent for 2008, including favorable brand mix.
"The company's new Strategic Plan expands and accelerates our cost reduction and operating efficiency initiatives generated by our Blue Ocean project, as well as our planned price increases. These initiatives, combined with our increased marketing and selling efforts, are all contributing to our very strong outlook for profit growth," said Mr. Busch IV.
Equity income, meanwhile, declined during the quarter. From the release:
Equity income decreased $28 million reflecting higher materials and operating costs at Grupo Modelo partially offset by volume growth and higher pricing. In the second quarter 2007 equity income for Modelo included a $12 million benefit from the return of an advertising fund that was part of a prior import beer contract. Tsingtao equity results include a $7 million charge due to higher Chinese income tax rates mandated by the government retroactively for 2007.
The earnings release can be seen here.
