Budweiser Sales Rise, InBev Shares Falter (BUD, TAP, SAM, SBMRY)

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Anheuser-Busch InBev SA/NV (NYSE: BUD) reported first quarter earnings this morning that beat consensus estimates for EPS and barely missed revenues, but the company’s shares are lower on concerns about US sales, rising costs, rising distribution expenses, and rising marketing costs.

AB InBev posted EPS of $1.06 versus the consensus estimate of $0.91 and revenue of $9.33 billion against a consensus estimate of $9.36 billion. EPS was 75% higher than the same period a year ago. Molson Coors Brewing Co. (NYSE: TAP) is expected to post EPS of $0.42 on revenue of $703.83 million for the first quarter, down a penny from the same period a year ago. Boston Brewing Co. Inc. (NYSE: SAM) is expected to post EPS of $0.40, up from $0.28 a year ago, on revenue of $112.13 million. SABMiller PLC (OTC: SBMRY.PK) is expected to haul in EPS of $1.89 on revenue of $19.23 billion for the 2012 fiscal year.

AB InBev’s outlook is weighing on the share price this morning. The company front-loaded US shipments in the first quarter, and anticipates “softer shipments in the US in 2Q12 as a result.” The company also expects a boost in the minimum wage in Brazil, its second largest market, to “accelerate industry beer volumes. The company also forecasts revenue to “grow ahead of inflation.”

The less-good nes is that cost of sales is expected to increase by “mid single digits,” and AB InBev’s distribution expenses are expected to rise “by mid to high single digits.” The company plans to “continue to drive top-line performance by investing behind our brands.” To investors, that all sounds like running hard in order to remain in the same place.

AB InBev’s shares are down about -0.7% this morning at $72.12 in a 52-week range of $49.05-$74.31.

Paul Ausick

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