Anheuser-Busch Q2 earnings rise, beat estimates; stock up 6%

Anheuser-Busch (NYSE: BUD), the company behind popular beer brand Budweiser, reported an increase in second-quarter earnings, supported by strong sales in key markets. The company’s stock gained about 6% Thursday morning following the announcement.

Earnings of the Belgium-based beverages company, excluding special items, rose to $1.16 per share in the June-quarter from $1.10 per share a year earlier. Unadjusted net profit attributable to stockholders was $2.49 billion or $1.25 per share, up from $1.94 billion or $0.98 per share reported in the second quarter of 2018. Earnings came in above estimates.

Topline Performance

Revenues were broadly unchanged year-over-year at $13.96 billion during the three-month period but exceeded analysts’ forecast. There was a 6.2% organic revenue growth, reflecting the strong sales performance in the key markets.

Revenues were broadly unchanged at $13.96 billion during the three-month period but exceeded analysts’ forecast

Total volumes grew by 2.1% during the quarter to 146.12 million hls, with own beer volumes rising 2.2% and non-beer volumes rising 1.8%. The growth was driven by strong performances in the key markets including Mexico, Brazil, Europe, South Africa, Nigeria, Australia and Colombia.

Outlook

The management said it expects to deliver strong revenue and EBITDA growth in fiscal 2019, driven by the solid performance of the brand portfolio and strong commercial plans. Revenue per hl growth is expected to be ahead of inflation based on premiumization and revenue management initiatives.

Related: Anheuser-Busch Q1 2019 Earnings Call Transcript

The company expects cost of sales per hl to increase by mid-single digits this year, with currency and commodity headwinds offsetting the cost management initiatives. The forecast for net capital expenditure is in the range of $4 million to $4.5 billion.

The average gross debt coupon is expected to be
between 3.75% and 4% in 2019, while net pension interest expenses and accretion
expenses are expected to be about $160 million per quarter.

Shares of Anheuser-Busch have gained 45% since the beginning of the year. They rose about 6% early Thursday, after closing the previous session lower.