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Things You Must Know Ahead of AB InBev's (BUD) Q2 Earnings

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Anheuser-Busch InBev SA/NV (BUD - Free Report) , also known as AB InBev, is slated to release second-quarter 2020 results on Jul 30. In the last reported quarter, it delivered a loss per share of 42 cents, missing the Zacks Consensus Estimate of a loss of 18 cents. Moreover, the company recorded a negative earnings surprise of 35.6%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for AB InBev’s second-quarter earnings is pegged at 31 cents per share, suggesting a decline of 75.2% from the year-ago quarter. The consensus estimate has moved up by 6.9% in the past 30 days. For second-quarter revenues, the consensus mark is pegged at $9.29 billion, suggesting a 33.5% decline from the prior-year reported figure.

Key Factors to Note

AB InBev has been witnessing greater impacts of the outbreak on its results since mid-March on the enforcement of lockdowns due to the coronavirus outbreak in most of its markets. The closure of restaurants and bars due to the lockdowns has been affecting the company’s sales, particularly due to softness in on-premise channel sales. Notably, the on-premise channel represented nearly one-third of its global volume in first-quarter 2019. The softness in the on-premise channel is likely to get reflected in the company’s top-line results in the second quarter.

AnheuserBusch InBev SANV Price and EPS Surprise

 

AnheuserBusch InBev SANV Price and EPS Surprise

AnheuserBusch InBev SANV price-eps-surprise | AnheuserBusch InBev SANV Quote

On the last earnings call, AB InBev predicted that the impacts of the pandemic on its second-quarter results will be more severe than the first quarter due to extended lockdowns and social distancing measures adopted by the governments. The company noted that global volumes declined nearly 32% in April, driven by the continued closure of the on-premise channels in most markets as well as restrictions on some operations due to the pandemic.

However, the company has been witnessing accelerated growth in its e-commerce channel, though this represents a smaller portion of total volume. The company’s B2B sales and e-commerce platforms have become more relevant amid the pandemic as consumers are confined to their homes. Notably, all markets have witnessed dramatically accelerated growth trends for digital sales, e-commerce and online marketing in recent months. Further, the company witnessed accelerated growth in its e-commerce channel in the first quarter, which partly negated the volume declines in on-premise and other channels.

Additionally, the company started witnessing positive trends in China and South Korea in the post-lockdown phase, with all bans being lifted by mid-March. Growth in these markets is likely to partly aid sales in the second quarter. Further, AB InBev’s premiumization and revenue-management initiatives are expected to have continued aiding revenue per hl in second-quarter 2020, a trend that was witnessed in the first quarter as well.

Zacks Model

Our proven model doesn’t conclusively predict earnings beat for AB InBev this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

AB InBev has a Zacks Rank #3 (Hold) and Earnings ESP of 0.00%.

Stocks Poised to Beat Earnings Estimates

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to deliver an earnings beat.

Monster Beverage Corporation (MNST - Free Report) currently has an Earnings ESP of +2.35% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Clorox Company (CLX - Free Report) presently has an Earnings ESP of +0.59% and a Zacks Rank #2.

Colgate-Palmolive Company (CL - Free Report) has an Earnings ESP of +0.81% and a Zacks Rank #3 at present.

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