A-B Misses Earnings Estimates

Weak organic beer volumes.

Anheuser-Busch reported first quarter earnings on Wednesday that fell short of Wall Street analysts' expectations.

A-B reported net income of $517.5 million for the quarter ended March 31, or 67 cents in diluted earnings per share, according to the company’s earnings release. The analyst consensus estimate was 69 cents per share, according to Thomson Financial.

Organic sales to retailers (sales not including acquired and import brands) showed weakness. Overall STRs were up by 0.1 percent, but that included a 1.7 point pop from acquired and import brands.

Shipments to distributors increased by 0.5 percent for the quarter, with acquired and import brands contributing 1.2 points to overall growth.

A-B's estimated marketshare was 50.2 percent for the quarter compared to 50.9 percent in the year-earlier period, the company said.

A-B’s 50 percent stake in Grupo Modelo continues to lift the company’s earnings. A-B’s equity income increased 30.3 percent to $159 million, primarily due to Modelo's improved earnings. That $159 million is nearly a third of A-B’s net income for the quarter.

In the earnings release, August Busch IV said: “We are encouraged by our progress on key initiatives during the first quarter.”

Morgan Stanley analyst Bill Pecoriello wrote: "Net net, organic beer volume remains weak in 1Q which remains a concern and it looks like revenue/barrel (ex import mix and other benefit) was below our forecast."

Noting weak STRs, Beer Marketer’s Insights Express said, “Not a great 1st qtr for AB.”

A-B shares were down 3.3 percent, or $1.74, at 12:46 eastern time.

To see a copy of the earnings release, go here.

To go to the Beer Marketer’s Insights homepage, click here.