February 8, 2001
Media & Marketing
Anheuser-Busch Quarterly Profit Increased by 9.7% in 4th Quarter
By CHIP CUMMINS Staff Reporter of THE WALL STREET JOURNAL
Anheuser-Busch Cos. said fourth-quarter earnings rose 9.7%, as higher beer prices cushioned its bottom line from disappointing sales.
The world's largest brewer said revenue per barrel inched up in the quarter after the company increased prices and reduced discounts for a chunk of its domestic market.
St. Louis-based Anheuser-Busch reported net income of $209.1 million, or
23 cents a diluted share, up from $190.6 million, or 20 cents a share, a year earlier. Revenue increased 2.6% to $2.79 billion from $2.72 billion in the fourth quarter of 1999.
Anheuser-Busch had announced last month that shipments to wholesalers increased just 1.4% from the year-earlier quarter, disappointing analysts who had expected increases closer to 2% to 2.5%. On Wednesday, the company cited colder-than-normal temperatures in November and December and an unfavorable comparison with the fourth quarter of
1999, when sales benefited from millennium celebrations.
The company said it sold 22.5 million barrels of beer in the U.S. in the fourth quarter. Total volumes for the quarter, including domestic and international sales and international equity-partner brands, hit 28.2 million barrels, up 2% from 27.7 million last year.
Domestic revenue per barrel grew 2.6% in the fourth quarter, buoyed by a
round of price increases and discount reductions started in October for a number of brands in the country's central and southern markets. A spokesman said the company was targeting western and northeastern markets with price increases in the current quarter.
The company's earnings met Wall Street expectations, according to a consensus forecast by First Call/Thomson Financial. But Marc I. Cohen, an analyst at Goldman Sachs Group Inc., said he was modestly disappointed with the quarterly performance. "There's a combination of a little bit weaker volumes, a little weaker price growth and a little weaker operating profit," he said.
Shares of Anheuser-Busch rose $1.52 to $42.05 in 4 p.m. composite trading on the New York Stock Exchange Wednesday.
Although beer-sales growth moderated from earlier in the year, Anheuser-Busch suggested it wasn't worried that higher prices were keeping sales down. "The domestic beer-industry environment continues to
support price increases and additional discount reductions," the company
said in a statement. That contrasts with Philip Morris Cos.' Miller Brewing Co. -- Anheuser-Busch's biggest domestic competitor -- which said earlier this year fourth-quarter volumes were hurt by higher retail pricing, among other factors. Adolph Coors Co. reports earnings Thursday, and analysts expect tepid volume growth at the country's No. 3 brewer as well.
For the year, net income totaled $1.56 billion, or $1.69 a share, up 11%
from $1.40 billion, or $1.47 a share, in 1999. Revenue in 2000 rose 4.8% to $12.26 billion from $11.70 billion.