BUD Stock Bubbles Higher as AB InBev Earnings Top Forecasts

by Burke Speaker | February 26, 2014 9:20 am

Soccer fans will be giving Anheuser-Busch InBev (BUD[1]) a boost as the world’s largest brewer is seeing an earnings growth and a potential BUD stock increase.

Anheuser-Busch InBev BUD-stock[2]Anheuser-Busch saw its Q4 core profit at $5.20 billion compared to an expected $4.94 billion.

BUD stock edged up slightly — nearly 1% — in pre-market trading.

The brewing company forecasts that the Brazilian and Mexican beer markets would return to growth this year — thanks to World Cup  soccer fans (which could boost profits by up to 2% in Brazil) and stronger economies in Mexico and the U.S.

At the same time, the BUD warned of higher input and marketing costs. It pointed out that colder days in January and February would also hamper sales, as more people stayed in as opposed to going out to area bars.

“Where weather has been good, for example the west coast, volumes have been fine,” Chief Financial Officer Felipe Dutra told a conference call.

From Reuters:[3]

The firm said its cost of sales per volume would increase by a low single-digit percentage as the effect of unfavourable exchange rates, principally the Brazilian real’s weakness to the dollar, outweighed lower global commodity prices.

AB InBev, which sold more than one in five beers drunk worldwide last year, said volumes slipped 1.7 percent in the final quarter of 2013, but revenue rose 4.6 percent to $11.71 billion, a little below the average $11.77 billion expected in a Reuters poll.

But it’s not just BUD that has seen hard times.

The world’s top brewers are leaning on countries in Latin America, Asia and Africa for growth. Consumer spending has slipped in Europe and the U.S. markets have seen limited expansion.

Growth in several developing countries did not hit what many of the brewing companies expected, which have affected earnings and stock.

BUD stock is down 4% year to date.

  1. BUD: http://studio-5.financialcontent.com/investplace/quote?Symbol=BUD
  2. [Image]: https://investorplace.com/wp-content/uploads/2011/03/bud.jpg
  3. From Reuters:: http://www.reuters.com/article/2014/02/26/abinbev-results-idUSL6N0LV0GB20140226

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