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It was a tale of two brewers this morning — two pretty successful brewers. Anheuser-Busch Cos. of St. Louis and InBev of Leuven, Belgium both reported increases in beer sales and revenues, although various charges dampened profits at both companies.

InBev also said its plan to acquire Anheuser-Busch by the end of the year is still on track. Regulatory approvals are still pending in the U.S., the U.K. and China. InBev said it is getting interest from possible buyers of "non core" assets, which would help it pay off its massive debt from the $52 billion deal.

Anheuser-Busch said third quarter revenues increased 6.5 percent to $4.9 billion on the back of a 3.2 percent increase in beer shipments worldwide. The company and its affiliates shipped 46.5 million barrels of beer in the quarter ending Sept. 30.
Profits dropped 5.7 percent to $666 million, mostly because of charges totaling $166 million for retirement packages and "outside professional services" related to the InBev transaction.

Anheuser-Busch’s earnings per share fell 5.3 percent to 90 cents per share.

Without one-time charges, earnings would have risen to $1.05 per share. That would have beaten Wall Street’s projections by one penny. Anheuser-Busch’s stock rose slightly on the New York Stock Exchange.

"Anheuser-Busch had an outstanding summer selling season, with record sales in the third quarter," said August A. Busch IV, president and chief executive officer, in a statement. The company gained market share and was able to raise prices on most of its beer. Commodity costs are high, but the company said it was trimming costs to compensate.

The national introduction of Bud Light Lime helped drive Anheuser-Busch’s shipments to wholesalers up 2.3 percent. Anheuser-Busch sells to wholesalers, who function as middlemen in bringing beer to stores, gas stations, bars and other outlets.

Anheuser-Busch’s financial results, which included shrunken income from its equity investment in Grupo Modelo, were more or less in line with expectations, Stifel Nicolaus analyst Mark Swartzberg wrote this morning. But that actually masks a "major improvement" in Anheuser-Busch’s U.S. beer business, its primary profit engine, he said.

Pretax profits from Anheuser-Busch’s U.S. brewing subsidiary were up 12.3 percent on a comparable basis, the biggest year-over-year increase this decade, Swartzberg told clients.

Bud Light in its various styles — standard Bud Light, Bud Light Lime, and a tomato-flavored version called Chelada — was a key factor in the results direct payday loan cash advance. Sales of the Bud Light brand were up 8 percent in the quarter, said W. Randolph Baker, Anheuser-Busch’s chief financial officer, in a conference call. InBev’s European brands scuh as Beck’s and Stella Artois, which A-B imports into the U.S., were up by "high single digits" percentages," Baker said.

After a string of noticeable declines, the Michelob family may have slowed the bleeding. The brand decreased "only slightly," Baker said.

But not all was rosy: Budweiser dropped 3 percent.

Meanwhile, InBev said its beer sales rose 1.9 percent worldwide, and revenues grew 7.7 percent. But profits fell 9 percent, to 649 million Euros ($827 million at current exchange rates) because of various charges and financing costs. InBev’s sales don’t yet include A-B results.

InBev gained or maintained market share in eight of its top 10 markets, as compared to last year. It grabbed market share in Argentina, Germany, Belgium, China, South Korea, Canada and the U.K. In Argentina, sales rose nearly 16 percent as InBev’s focus on premium brands helped it overcome economic and political uncertainties.

In Brazil, one of InBev’s biggest markets, its market share is "stable."

But sales rose only about 1 percent in China, where InBev said the industry is weak. (Anheuser-Busch might beg to differ: Its beer volumes rose by mid single-digit percentages and profits grew in China, Baker said.)

InBev’s beer sales dropped by more than 5 percent in central and eastern Europe; InBev’s own beer volumes fell about 10 percent in Russia.

InBev has decided to put greater focus on a fewer number of brands, a strategy the company says is working. Sales of the company’s two high-value global brands, Stella Artois and Beck’s, jumped 8.1 percent. InBev also increased its spending on marketing and sales by 12.5 percent during the third quarter.

On Anheuser-Busch’s conference call, Baker congratulated InBev’s shareholders on their pending purchase of the biggest U.S. brewer.

"You are acquiring a great company with strong momentum," Baker said. The combined forces of Anheuser-Busch and InBev, he said, have a "bright future."

jmcwilliams@post-dispatch.com | 314-340-8372

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