AB InBev exceeds pre-pandemic revenue but profit underwhelms
The brewer of Budweiser, Stella Artois and Corona did benefit from increased beer consumption across the Americas, in Europe and South Africa
How should investors react to soaring earnings?
Belpointe chief strategist David Nelson, Gibbs Wealth Management President Erin Gibbs and Invest Diva CEO and author Kiana Danial break down today’s markets, cryptocurrency and this earnings season.
Anheuser-Busch InBev, the world's largest brewer, underwhelmed on profit as costs increased and despite driving second-quarter revenue to above pre-pandemic levels.
The brewer reported lower core profits in its two biggest markets, the United States and Brazil, as cans and distribution became more expensive.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
AB InBev retained its forecast that earnings before interest, tax, depreciation and amortization (EBITDA) would grow by between 8% and 12% this year, with revenue increasing at a faster pace.
In the second quarter, that profit figure rose 31% on a like-for-like basis to $4.85 billion, against consensus expectations for a 35% increase, according to a company-compiled consensus. The figure was inflated by $226 million of Brazilian tax credits.
Analysts at Citi said, excluding that, core profit clearly missed estimates, and the lack of upgrade to the forecast was another negative.
BOSTON BEER STOCK OBLITERATED AS HARD SELTZER HIT
AB InBev shares were down 5.6% at 54.86 euros at 0735 GMT, placing them among the weakest performers in the FTSEurofirst300 index of leading European shares, meaning they are now also lower in the year to date.
The company stressed its outlook reflected its current assessment of the scale and magnitude of the pandemic and could be subject to change.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BUD | ANHEUSER-BUSCH INBEV | 53.92 | -1.14 | -2.06% |
In a clear sign that the pandemic and related restrictions are not over, South Africa instituted a new alcohol sales ban for four weeks from late June and ongoing curbs in South Korea led to lower beer sales there.
COCA-COLA RAISES REVENUE FORECAST AS DEMAND REBOUNDS ON REOPENING BOOST
A year on from its worst quarter of the COVID-19 crisis, the brewer of Budweiser, Stella Artois and Corona did though benefit from increased beer consumption across the Americas, in Europe and South Africa, including a leap of more than 50% in Colombia.
Only in China, which moved out of its coronavirus lockdown earlier in 2020, were beer volumes lower.
Michel Doukeris, the former North America zone head who took over as chief executive from fellow Brazilian Carlos Brito on July 1, said revenue in the April-June period was 3.2% higher than in the same period of 2019.
CLICK HERE TO READ MORE ON FOX BUSINESS
The world's second largest brewer, Heineken, reports its first-half results on Monday, with global number three Carlsberg on Aug. 18.
(Reporting by Philip Blenkinsop; Editing by Anil D'Silva)