Anheuser-Busch 1Q earnings rise 3.7 pct

Anheuser-Busch 1Q earnings rise 3.7 pct

	Published : Wed, 25 Apr 2007 17:32 By : Agencies Print this Story

ST. LOUIS (AP) - Pricier beer and fewer discounts pushed Anheuser-Busch Cos. Inc. earnings up 3.7 percent in the first quarter, the nation's largest brewer said Wednesday, but the results were below Wall Street expectations.

Anheuser-Busch, the maker of Budweiser, Bud Light and other beers, reported a profit of $518 million, or 67 cents per share, in the period ending March 31, up from earnings of $499 million, or 64 cents per share, in the first quarter of 2006.

Net revenue for the St. Louis-based company rose 2.7 percent to $3.86 billion from $3.76 billion.

Analysts polled by Thomson Financial expected earnings per share of 69 cents on revenue of $3.94 billion. Anheuser-Busch shares fell $1.59, or 3 percent, to $50.76 in midday trading on the New York Stock Exchange.

'We are encouraged by our progress on key initiatives during the first quarter,' said August A. Busch IV, president and chief executive officer. 'We successfully implemented domestic beer price increases and discount reductions earlier this year and the pricing environment continues to be favorable.'

U.S. beer shipments-to-wholesalers rose 0.5 percent to 25.7 million barrels from 25.6 million barrels a year earlier, while international shipments-to-wholesalers jumped 8.7 percent to 5.2 million barrels from 4.8 million barrels. International volume consists of Anheuser-Busch brands produced overseas plus exports from U.S. breweries.

The increase in international shipments was driven primarily by sales in China and Canada, Anheuser-Busch said.

'These factors, combined with our marketing and selling initiatives, provide a good foundation for accelerated earnings growth in 2007,' Busch said.

Anheuser-Busch's U.S. market share declined to 50.2 percent from 50.9 percent in the first quarter of 2006, based on estimated shipping volume using information provided by the Beer Institute and the U.S. Department of Commerce.

Analyst Juli Niemann of Smith Moore & Co. in St. Louis believes Anheuser-Busch is spending too much time and money marketing its newer non-beer products such as so-called 'malternatives' aimed at 20-somethings.

'This is a case of when you are in a mature industry, tend to your knitting and focus on your profit margins,' she said. 'I don't know that (the beer industry) is declining, but it's definitely mature.'

The company said earnings per share benefited from an ongoing stock repurchase program. Anheuser-Busch repurchased more than 9 million shares in the first quarter.