Anheuser-Busch sees higher quarterly income
NEW YORK (Reuters) - Brewer Anheuser-Busch Cos Inc BUD.N said on Friday it expects pretax income for the third quarter to rise at a low double-digit rate, helped by price increases and sales of its new Bud Light Lime beer.
The maker of Budweiser and Michelob, which has agreed to be taken over by Belgian brewer InBev NV INTB.BR, also said quarterly beer sales by volume rose 2.3 percent in the United States, helped by the launch of Bud Light Lime.
Beer sales from wholesalers to retailers, a better indicator of consumer demand, rose 3.6 percent, the brewer said.
Anheuser shareholders still have to vote on the InBev buyout, with the deal expected to close by the end of the year.
The brewer, which recently raised prices on more than 85 percent of its domestic beer portfolio, said it expects revenue per barrel to rise 4 percent in the quarter, which ended on September 30.
Anheuser beers are sold abroad, and the company also owns half of Mexico's Grupo Modelo (GMODELOC.MX) and 27 percent of China's Tsingtao Brewery Co Ltd (600600.SS).
Volume for the international beer operations is expected to be up at a mid-single digit rate in the third quarter, with pretax profits up over 20 percent, the company said.
But because of recent weakness of Modelo's Corona in the United States, the company expects equity income for the full year to decline.
Anheuser is scheduled to report third-quarter earnings on November 6.
InBev, currently the world's second-biggest brewer behind SABMiller PLC (SAB.L), also pre-announced results on Friday, saying it expects its third-quarter margins to contract, as cost pressures mounted and sales in some regions slowed. Its shares fell more than 5 percent.
DEAL CONCERNS
In July, Anheuser accepted a sweetened $52 billion takeover bid from InBev that will create the world's largest beer maker and end roughly 150 years of independence for the St. Louis-based company.
But with the biggest financial crisis since the Great Depression slamming the brakes on credit in recent weeks, the fate of the deal has been called into question because InBev is relying on several European banks for funding.
Anheuser shares have been trading well below the agreed takeover price of $70 per share in the last two weeks, indicating doubts in the market.
Morningstar analyst Ann Gilpin recently raised the uncertainty rating around her fair value estimate for Anheuser-Busch to account for risks related to the current credit environment. Continued...
