US: Anheuser-Busch up in Q2 despite UK weakness

Anheuser-Busch has posted a steady rise in profits and sales for its second quarter.

The US brewer said yesterday (25 July) that net income for the three months to the end of June rose by 6.1% on the corresponding period a year earlier, reaching US$677m. Net sales followed suit, increasing by the same percentage to $4.5bn.

In the US, beer sales rose 6.9%, as higher volumes and the effect of price increases earlier in the year offset rising production costs and higher marketing spend. Internationally, sales volumes were up by 4%, as stronger performances in China, Canada and Mexico offset lower results in the UK.

For the first six months of this year, net income rose 5.1% year-on-year to $1.2bn on the back of a 4.5% lift in net sales, which came in at $8.37bn.

The brewer noted, however, that its share of the US beer market was flat for the first six months, slipping to 48.8% from 48.9% a year earlier.

"Anheuser-Busch had a solid quarter in many aspects of our core operations," said August A. Busch IV, A-B's president and CEO. "Led by US beer operations, all of our business segments reported improved earnings in the second quarter and the company is on track to deliver accelerating earnings growth in the second half of the year. The positive outlook is based on the favourable pricing environment, our broadened US beer portfolio to access high-margin growth opportunities, successful productivity improvement initiatives that are mitigating cost pressures and enhanced earnings contributions from our international beer segment, led by Grupo Modelo.

"We continue to target long-term earnings per share growth in the 7 to 10% range and expect the company's 2007 earnings per share increase to exceed this range."

The brewer also said that it plans to introduce further price increases in the US early next year, with a few selective rises coming through later this year.

Separately, A-B upped its regular quarterly dividend by 11.9%. A dividend of $0.33 per share will be paid on 10 September to shareholders of record on 9 August.