Anheuser-Busch Cos. Inc., the largest U.S. brewer, said Wednesday that quarterly profit rose due to price increases, but domestic market share slipped and the company tweaked its 2005 guidance.
The brewer said fourth-quarter net income rose to $332 million, or 42 cents a share, from $294 million, or 36 cents a share, in the same quarter last year.
Earnings per share for the most recent fourth quarter were helped by a 1.8 cent per share gain on the sale of its stake in Chilean brewer Compania Cervecerias Unidas and a deferred tax benefit of 1.2 cent per share related to its Mexican Modela investment.
According to Reuters Estimates, analysts had forecast, on average, earnings per share of 39 cents -- excluding one time items -- for the company, which is locked in a fierce battle with SABMiller Plc.'s Miller Brewing for U.S. market share.
The company said fourth quarter gross sales rose to $3.9 billion from $3.7 billion. Net sales, which exclude the impact of excise taxes, rose to $3.4 billion from $3.2 billion.
Anheuser expected earnings per share growth in the 6 percent to 9 percent range for 2005, excluding the one-time items in 2004 and including the impact of expensing stock options in 2005 and 2004.
"This is 100 basis points lower than the original range that A-B gave in October of 7 to 10 percent. Our current '05 EPS growth is 6.4 percent," said Citigroup analyst Bonnie Herzog.
"We would not have expected management to announce a reduction in its 2005 guidance so early in the year, but this confirms our thesis that the pricing environment that once long buoyed earnings could be challenging this year."
Worldwide beer sales volume for the fourth quarter rose 8.8 percent to 27.6 million barrels.
The brewer said the pricing environment continued to be "favorable" as a result of which domestic beer revenue per barrel increased 2.3 percent in the fourth quarter and grew 2.5 percent for the full year.
It said it completed the first stage of its pricing plan for 2005 in October 2004 and the second phase would be implemented this week.
But Anheuser-Busch said its domestic market share, excluding exports, for the full year 2004 was 49.6 percent, compared with 2003 market share of 49.7 percent.
Sales-to-retailers were down 3.2 percent, hurt by abnormally wet weather in many markets, especially during the key summer selling season. The brewer also noted a general slowdown in consumer spending during the year, particularly among lower income consumers.
Anheuser-Busch shares nosed into positive territory just after the results and were up almost 0.2 percent at $49.37 by the close on the New York Stock Exchange.
