Nice gain yesterday on upbeat growth outlook. Look for this one to be a good play in this uncertain market. Everyone loves beer
Anheuser-Busch sees headier growth in 2007
1:48p ET September 6, 2007 (MarketWatch)
CHICAGO (MarketWatch) -- Anheuser-Busch expects its 2007 earnings growth to surpass its long-term target rate, the brewing behemoth said Thursday, citing recovering beer industry volume, favorable pricing, an expanded portfolio of craft and imports and distribution opportunities in other beverage categories.
During afternoon trading, Anheuser-Busch said it continues to see accelerated sales and earnings growth in the second half of this year, with earnings per share growth for all of 2007 above its 7% to 10% long-term objective.
"U.S. beer industry volume in 2006 and year-to-date has grown at a healthy pace," the company said in a release ahead of an investor presentation in Boston. "Over this period, import and craft beers in particular have enjoyed strong growth and Anheuser-Busch has added considerably to its portfolio and presence in these growing segments through alliances, acquisitions and new product development."
With mass-market domestic suds in the doldrums -- and sprits companies steadily nibbling away at their share of the beverage alcohol business -- brewers have increasingly turned to craft, flavored or imported products to maintain growth.
Indeed, Anheuser-Busch noted that U.S. beer sales-to-retailers were below expectations in the first half of the year, although volume trends have shown some improvement in the second half. At the same time, pricing has been relatively favorable as a dearth of deep discounting -- and some new higher-end brands -- helped it push revenue per barrel up 2.7% in the first half. And it is planning to raise prices on most of its volume by early next year.
Anheuser-Busch added that is has "also been leveraging its superior distribution system to pursue high-margin growth opportunities in non-alcohol beverages, such as energy drinks and super-premium waters."
Shares of Anheuser-Busch were up almost 2% at $49.38 in afternoon action.