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Apr-23-2008Anheuser Posts Drop in Net As Sales to US Retailers Fall(topic overview)
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Analysts polled by Thomson Financial expect earnings of 72 cents per share on revenue of $4.05 billion. ANALYST TAKE: Banc of America Securities analyst Bryan Spillane said in a note to investors he expects some improvement from last quarter in the company's core brand sales. Spillane said new products, higher prices and more consumers drinking at home should help the company grow its sales and profit in the quarter. He said that he is encouraged by Anheuser-Busch's plans to reinvigorate its core brands. "Importantly, we are encouraged that management and the Street agree that re-starting the core is the hinge for 2008 _ whether you believe resuscitation plans will work or not, now is the time to take a position," he said. [1] Anheuser-Busch Cos., Inc. (NYSE: BUD) reported improved sales and earnings for the first quarter 2008 today at its annual meeting of shareholders held in Orlando, Fla. Consolidated net sales increased 6.2 percent in the first quarter 2008 and earnings per share increased 6.0 percent.[2] Net income in the first quarter 2008 decreased 1.3 percent and diluted earnings per share were up 6.0 percent versus prior year.[3] Earnings per share increased due to the company having fewer shares outstanding during the last quarter compared to last year's first quarter.[4]
"Our operations achieved solid results in the quarter, growing sales and operating income six percent over the first quarter last year," said company president and CEO August A. Busch IV. "We have successfully implemented U.S. beer price increases and expect good revenue per barrel performance in 2008.[5] Revenue per barrel(1) was up 2.3 percent primarily due to the implementation of price increases on a majority of the company's U.S. volume late last year and in the first quarter of 2008.[3]
International volume, consisting of Anheuser-Busch brands produced overseas by company-owned breweries and under license and contract-brewing agreements, plus exports from the company's U.S. breweries, increased 3.1 percent for the first quarter 2008, driven primarily by sales in Canada, Mexico, Argentina and China.[3] While U.S. beer sales rose by 4% on improved revenue per barrel and a very slight lift in sales volumes, international volume plus exports from the company's U.S. breweries increased by 3.1%, driven primarily by sales in Canada, Mexico, Argentina and China.[5]
U.S. beer sales were up due to increased volume and pricing, international beer net sales increased 20 percent from higher volume, packaging segment sales were up 8 percent due primarily to higher volume and entertainment sales increased 20 percent primarily from higher attendance.[3]
Market share is based on estimated U.S. beer industry shipment volume using information provided by the Beer Institute and the U.S. Department of Commerce. St. Louis-based Anheuser-Busch Cos. Inc. (NYSE: BUD), through its Anheuser-Busch Inc. subsidiary, is the leading domestic brewer, holding a 50.9 percent share of U.S. beer sales.[4] When Anheuser-Busch Cos. reports first-quarter results Wednesday, Wall Street will get its first look at the effectiveness of Chief Executive Officer August Busch IV's strategy to revitalize its major brands. Investors also will get to see how much the brewing behemoth's profits are pinched by the slump at its Mexican partner, Grupo Modelo SA, which makes Corona Extra. Anheuser, which controls nearly half the U.S. beer market in volume terms, is pumping more money into ads for traditional brands such as Budweiser and Michelob this year, and cutting spending on some newer brands.[6]
U.S. beer shipments-to-wholesalers increased 0.4 percent for the first quarter 2008, but sales-to-retailers were down 0.7 percent, and sales-to-retailers for Anheuser-Busch produced brands, excluding imports, declined 1.4 percent.[4] A-B owns a 50 percent share in Grupo Modelo, Mexico's leading brewer, and a 27 percent share in China brewer Tsingtao, whose namesake beer brand is the country's best-selling premium beer. The company said its estimated U.S. market share increased for the first quarter to 50.9 percent, compared to first quarter 2007 market share of 50.6 percent.[4] Worldwide beer volume is comprised of domestic volume plus international volume. Equity partner brands volume, representing the company's share of its equity partners' volume reported on a one-month lag, increased 9.3 percent for the first quarter of 2008 due to increased volume for Modelo and Tsingtao.[3]
Total brands volume reached 38.5 million barrels, up 2.3% from last year. Equity partner brands volume, which represents the company's share of its equity partners' volume reported on a one-month lag, increased 9.3% on higher volume for Modelo and Tsingtao. Separately, the company said that its Board of Directors has declared a regular quarterly dividend of $0.33 per share, payable on June 9, 2008, to shareholders of record on May 9, 2008.[7] Anheuser had 721.6 million shares outstanding as of March 31, when the latest quarter ended, down from 773.3 million a year ago. The company sold 38.5 million barrels of beer, up 2 percent from 37.6 million barrels a year ago, driven by strong sales of the foreign beers in its portfolio. Sales from wholesalers to retailers were down 0.7 percent, but excluding the impact of import brands such as Stella Artois and Beck's, would have been down 1.4 percent.[8] Tsingtao Brewery reported beer sales of 5.05 billion liters last year, up 11 percent from a year ago. The company expected its beer sales to hit 5.7 billion liters in 2008, when it takes the opportunity of being an Olympic sponsor to boost brand recognition and market share.[9] Revenue increased 15.9 percent to 13.7 billion yuan last year, said Tsingtao Brewery, which is based in the eastern coastal city of Qingdao. Rapid rises in personal incomes in China, the world's largest beer producer and consumer, have boosted its beer sales by 13.8 percent to 39.3 billion liters in 2007.[9]
"Tsingtao is increasing margins by selling more premium beer.'' Tsingtao is seeking to increase beer sales 14 percent this year to offset the effect of the higher tax rate. The brewer, founded in 1903 when the city of Qingdao was under German rule, paid 33 percent taxes last year and will pay a rate of 25 percent this year, compared with 15 percent in 2006. The beermaker plans to sell 2.2 million kiloliters of Tsingtao brand beer this year, up from 1.93 million kiloliters last year, with total sales rising to 5.7 million kiloliters from 5.05 million in 2007.[10] The brewer, whose domestic market share was little changed at 12.8 percent last year, plans to boost beer sales during the Olympics Games in Beijing in August, according to the statement.[10]
The annual net profit was 27.7 percent to 558 million yuan (80 million U.S. dollars), or 0.43 yuan per share, in 2007, up from 437 million yuan, or 0.33 yuan per share, in 2006, the company said in a statement to the Shanghai Stock Exchange late Monday, citing domestic accounting standards. The country's leading beer producer adjusted its profit for the first nine months to 560 million yuan from 695 million yuan on April 16. It said the corporate income tax would be 33 percent, rather than 15 percent.[9] Net income fell 1.3 percent from $518 million, or 67 cents per share, to $511 million, or 71 cents per share.[4] The beer giant reported net income of $510.9 million, or 71 cents as share, compared with $517.5 million, or 67 cents a share, a year earlier.[11]
Wednesday reported first-quarter income of $511 million, or 71 cents a share, a penny short of the mean estimate of analysts polled by Thomson Financial.[12]
Anheuser-Busch's earnings per share amounted to 71 cents. That was below Wall Street expectations of 72 cents per share. Its shares rose 46 cents to $47.8 in morning trading.[13] Wall Street analysts forecast earnings of $0.29 per share, on sales of $1.31 billion. Another peer, Sabmiller Plc (SBMRY.PK)'s fourth-quarter results are expected to be released on May 15.[7]
On average, 13 analysts polled by First Call/Thomson Financial expected the company to report earnings of $0.72 per share.[7] Earnings per share rose to $0.71 from $0.67 a year ago, reflecting the benefit from the company's ongoing share repurchase program.[7]
By contrast, earnings per share rose to 71 cents from 67 cents, in line with analysts' average expectation for 71 cents, according to Reuters Estimates.[8] Earnings per share rose 6% on lower share count, but missed analysts' forecast by a penny.[7]
Operating income was also up, by 6.2% at $763m, with earnings per share rising by 6% to $0.71.[5]
The per-share earnings, boosted by a lower share count, met Wall Street's expectations, and shares of the largest U.S. brewer rose more than 1 percent.[8] The company's estimated U.S. market share for the first quarter 2008 was 50.9 percent, compared to first quarter 2007 market share of 50.6 percent.[3] Worldwide Anheuser-Busch beer sales volume for the first quarter 2008 increased 0.8 percent, to 31.2 million barrels.[3] Worldwide Anheuser-Busch beer sales volume, which comprised of domestic volume and international volume, rose 0.8% to 31.2 million barrels in the quarter.[7]
International volume increased 3.1% to 5.4 million barrels, driven by sales in Canada, Mexico, Argentina and China.[7] International volume increased 3.1 percent for the quarter primarily driven by sales in Canada, Mexico, Argentina and China.[4]
International beer pretax income was up $18 million, primarily due to increased profits in China, Canada and improved results in the United Kingdom.[3] Operating income increased 6.2 percent due primarily to higher profits for U.S. beer and international beer operations and improved results from entertainment operations, partially offset by lower packaging segment results.[3]
U.S. beer shipments-to-wholesalers increased 0.4 percent for the first quarter 2008, with import brands contributing 60 basis points to overall growth.[3] Equity partner brands volume increased 9.3 percent for the first quarter due to increased volume for Modelo and Tsingtao.[4]
Equity income decreased $33 million in the first quarter 2008, primarily due to a combination of higher materials and operating costs for Grupo Modelo partially offset by higher beer volume.[3] Entertainment segment pretax results improved $12 million primarily from increased attendance due to the Easter holiday occurring in the first quarter in 2008 versus the second quarter last year.[3]
A-B sold 25.8 million barrels in the U.S. in the first quarter, a 0.4 percent increase from 25.7 million barrels sold in the country during last year's first quarter.[4]
The brewer Anheuser-Busch Cos. Inc. says its profit slipped 1.3 percent in the first quarter as rising ingredient costs offset rising revenue.[13] NEW YORK (Associated Press) - Anheuser-Busch Cos. reports earnings for the fiscal first quarter on Wednesday.[1] Anheuser-Busch will conduct a conference call with investors to discuss first quarter earnings results at 3 p.m. CDT today.[3]
First quarter 2008 sales-to-retailers were down 0.7 percent, and sales-to-retailers for Anheuser-Busch produced brands, excluding imports, declined 1.4 percent.[3] Wholesaler inventories for Anheuser-Busch produced brands at the end of the first quarter were approximately the same as a year ago.[3]
The US-based brewer said today (23 April) that net income for the first quarter came in 1.3% down on the corresponding period a year earlier, at US$511m.[5] The nation's biggest brewer reported Wednesday that net income fell to $511 million for the January-March quarter from $518 million a year ago.[13] Anheuser-Busch Cos.' (BUD) first-quarter net income fell to $511 million from $518 million a year earlier, despite increased U.S. peer prices.[14] The maker of Budweiser, Bud Light and Michelob said first-quarter net income fell to $510.9 million from $517.5 million a year ago.[8]
Full-year net income was 538.9 million yuan ($77 million), less than a projected profit of 639.4 million, according to the median estimate in a Bloomberg survey of four analysts.[10]
Increased sales from all business segments helped boost Anheuser-Busch Cos. Inc.'s first-quarter net sales by 6.2 percent, though net income dropped slightly as the company suffered a decrease in sales-to-retailers.[4] Anheuser-Busch Cos. reported a 1.3% drop in first-quarter net income amid lower-than-expected beer sales to retailers.[11]
BEIJING, April 21 (Xinhua) -- Tsingtao Brewery Co., part owned by the world's largest beer maker Anheuser-Busch Cos., reported an expected fourth-quarter loss of two million yuan due to weak sales in the winter and rising costs.[9]
April 22 (Bloomberg) -- Tsingtao Brewery Co., the Chinese beer company partly owned by Anheuser-Busch Cos., rose in Shanghai trading, reversing an earlier loss sparked by a 2007 profit report that missed analysts' estimates.[10]
The following is a summary of key developments and analyst opinion related to the period. OVERVIEW: Brewer Anheuser-Busch, the company behind Budweiser and Bud Light, expects its profit to be hit by rising commodity costs in 2008.[1]
The company said in January that rising grain and other commodity costs would raise the cost of making a barrel of beer by 3 percent during the year. To offset the higher costs, the brewer said it would attempt to improve its supply chain and hold down administrative costs. The company has been trying to increase demand for its core brands to stem the tide of drinkers switching to craft beers or imports.[1] Anheuser-Busch also owns a 50 percent share in Grupo Modelo, Mexico's leading brewer, and a 27 percent share in China brewer Tsingtao, whose namesake beer brand is the country's best-selling premium beer.[15] Tsingtao, 27 percent owned by Anheuser-Busch, the St. Louis- based maker of Budweiser and Michelob, proposed a 0.22 yuan a share cash dividend for 2007, the same as a year earlier.[10]
Anheuser-Busch (nyse: BUD - news - people )'s estimated U.S. market share for the quarter rose to 50.9% from 50.6% a year earlier.[12] Market share is based on estimated U.S. beer industry shipment volume using information provided by the Beer Institute and the U.S. Department of Commerce.[3] Income before income taxes for U.S. beer was up $18 million, reflecting higher volume and pricing, partially offset by increased marketing expense for trademark brands.[3] Beer volume for all of A-B's brands, including equity partner brands, increased 2.3 percent from 37.6 million barrels sold to 38.5 million barrels sold.[4] U.S. beer shipments to wholesalers were up 0.4% to 25.8 million barrels, with import brands contributing 60 basis points to overall growth.[7]
'We are increasing marketing and sales support for our core beer brands, and, although U.S. beer sales-to-retailers results were below expectations, we are optimistic concerning the outlook for beer sales during the key summer selling season," president and chief executive officer August A. Busch IV said. Among others in the sector, Molson Coors Brewing Co. (TAP) is slated to announce its first-quarter results on May 6.[7] In 2008, the company changed reporting responsibility for beer sales in the Caribbean region from U.S. Beer to International Beer and also reassigned certain administrative and technology support costs between Corporate and U.S. Beer.[3]
Price increases helped quarterly net sales rise 6 percent to $4.10 billion as the company Continued.[8] Net sales for the quarter ended March 31 were up 6.2 percent from $3.86 billion to $4.01 billion.[4]
Net sales rose to $4.1 billion from $3.86 billion a year earlier, topping Wall Street's $4.05 billion estimate.[12] Consolidated net sales increased 6.2% to $4.10 billion from $3.86 billion last year.[7]
Net sales increased 6.2 percent on increased sales from all business segments.[3]
Packaging segment sales were up 8% on volume growth and entertainment sales increased 20% primarily from increased attendance.[7]
Anheuser-Busch has posted a slip in net income, despite a rise in sales for the first three months of this year. [5] The company's first-quarter net earnings were $511 million, lower than $518 million in the prior year quarter.[7] Packaging segment pretax income decreased $5 million primarily due to lower earnings from recycling operations.[3]
Equity income for the first quarter 2007 included a $17 million benefit from the return of an advertising fund that was part of Modelo's former beer import contract.[3] The company plans to roll out the drink with a $35 million marketing campaign with TV ads and outdoor signs. In the quarter, several state attorneys general subpoenaed documents from the company in February as part of an investigation into the company's marketing efforts for its caffeinated alcoholic beverages.[1]
Eighteen Wall Street analysts had a consensus revenue estimate of $4.05 billion for the quarter.[7] Overall revenue rose 5.4 percent to $4.6 billion from $4.4 billion last year.[13]
"We have successfully implemented U.S. beer price increases and expect good revenue per barrel performance in 2008. [3] Going ahead, Anheuser-Busch said that it expects good revenue per barrel performance in 2008.[7]
ST. LOUIS, April 23 /PRNewswire-FirstCall/ -- August A. Busch IV, president and chief executive officer of Anheuser-Busch Cos. Inc. today announced that the Board of Directors has declared a regular quarterly dividend of 33 cents on shares of the company's outstanding common stock, payable June 9, 2008 to shareholders of record May 9, 2008. [15] On a per-share basis, earnings rose to 71 cents from 67 cents, as the most recent quarter had fewer number of shares outstanding.[14] A Thomson Reuters survey of analysts, on average, predicted earnings of 72 cents a share for the quarter.[14]
BUD is trading at $47.95, up $0.55, on a volume of 1.27 million shares. [7] Tsingtao's Shanghai-traded shares gained 1.7 percent to 22.39 yuan, after earlier falling as much as 9 percent, tracking a rally in the benchmark CSI 300 Index in the last hour of trading.[10] The company proposed an annual cash dividend of 0.22 yuan per share, flat from 2006.[9]
International volume consists of Anheuser-Busch brands produced overseas by company-owned breweries and under license and contract-brewing agreements, plus exports from the company's U.S. breweries. [7] NEW YORK, April 23 (Reuters) - Anheuser-Busch Cos Inc (BUD.N: Quote, Profile, Research ) reported lower quarterly profit on Wednesday, as U.S. retailers purchased less beer from wholesalers.[8]
Sales-to-retailers trends have improved in April and for the first three weeks of the month are up 2 percent for Anheuser-Busch produced brands.[3] China's benchmark CSI 300 Index rose for the first time in five days today, gaining 0.9 percent.[10]
Key operating results and a discussion of financial highlights for the first quarter 2008 compared to the first quarter 2007 follow.[3]
The company has an "optimistic" outlook for beer sales during the summer selling season. [14] The company brews the world's largest-selling beers, Budweiser and Bud Light.[15]
The company is an official sponsor of the sports event. "Tsingtao is still under pressure this year because of rising barley costs,'' said Peng Danxue, an analyst at Everbright Securities Co. in Shanghai.[10]
Worldwide beer volume is comprised of domestic volume plus international volume. [4]
SOURCES
1. Earnings Preview: Commodity costs pressure Anheuser-Busch
2. SunHerald.com : Anheuser-Busch Cos. Reports Improved Sales and Earnings Per Share for the First Quarter 2008
3. Anheuser-Busch Cos., Inc. :: Anheuser-Busch Cos. Reports Improved Sales and Earnings Per Share for the First Quarter 2008
4. Anheuser-Busch reports rise in Q1 sales, slight drop in profit - St. Louis Business Journal:
5. US: Q1 sales up, but income slips for Anheuser-Busch: Beverage News & Comment
6. Free Preview - WSJ.com
7. Anheuser-Busch Q1 Net Profit Declines; EPS Rises, Yet Misses Estimate - Update [BUD] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
8. UPDATE 2-Anheuser-Busch first-quarter net income falls | Reuters
9. Tsingtao Brewery reports slight loss in Q4_English_Xinhua
10. Bloomberg.com: Worldwide
11. Free Preview - WSJ.com
12. Anheuser-Busch 1Q earnings 71 cents a share; sales rise to $4.2 billion - Forbes.com
13. Anheuser-Busch 1Q profit falls on higher ingredient costs
14. Anheuser-Busch 1Q Net Falls; Co Optimistic On Summer Sales
15. Anheuser-Busch Cos., Inc. :: Anheuser-Busch Declares Quarterly Common Stock Dividend
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