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Factors Setting the Tone for 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 2018 results on Jul 26. In the last reported quarter, the company delivered negative earnings surprise of 7.6%.
In fact, the company has reported earnings miss in eight of the last nine quarters. It recorded an average negative surprise of 7.7% in the trailing four quarters. The Zacks Consensus Estimate for the second quarter is pegged at $1.05 per share, reflecting year-over-year growth of 10.5%. However, estimates witnessed a downtrend in the last seven days.
Analysts polled by Zacks anticipate total revenues of $13.9 billion, which reflects a decline of 2.1% year over year. Nonetheless, the company has delivered positive sales surprise in four of the last six quarters, including consecutive beats in the last two quarters. While solid sales growth and synergies from cost savings continue to aid results, higher marketing expenses remain a deterrent.
How Things are Shaping Up For This Announcement
As mentioned above, the company’s dismal earnings trend is a major concern for the stock. Despite the solid sales in the first quarter, we note that volumes were strained due to the decline in non-beer volumes. This stemmed mainly from the weakness in Brazil and Peru. Soft volumes, higher cost of sales and increased marketing expenses were the key deterrents in the company’s otherwise strong quarter, which reflected solid sales growth and margin expansions. Moreover, the company is witnessing volatility in certain key markets, which should continue to weigh upon results.
Nonetheless, the company anticipates delivering strong top-line and EBITDA growth for 2018, backed by solid brand performances and robust commercial plans. It also expects accelerated growth through the rest of 2018, particularly in the second half. Moreover, we believe, AB InBev is poised to grow in the long run, driven by the strength of the Budweiser brand and robust initiatives.
AB InBev’s robust brand portfolio and a solid geographical reach remain strengths. Further, given the rising demand for craft beer space, we expect the company to benefit from its constant expansion in this category. Also, it keeps introducing near-beer alternatives, along with no- and low-alcohol beers, which is encouraging.
Additionally, the company remains well on track with the SABMiller integration. It expects synergies and cost savings of nearly $3.2 billion from the integration, which are expected to be realized in four years from the closing of the acquisition (or by October 2020).
Though the company holds a mixed view for the upcoming results, the stock has improved 5.9% in the past month, outperforming the industry’s gain of 1.9%. This reflects an optimistic investor sentiment for the stock, ahead of the earnings release.
What the Zacks Model Unveils
Our proven model does not conclusively show an earnings beat for AB InBev this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
AB InBev’s Earnings ESP of 0.00% and Zacks Rank #4 (Sell) make surprise prediction inconclusive.
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) has an Earnings ESP of +3.07% and a Zacks Rank of 3.
Brown-Forman Corporation (BF.B - Free Report) has an Earnings ESP of +0.52% and a Zacks Rank #3.
Today's Stocks From Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Factors Setting the Tone for AB InBev's (BUD) Q2 Earnings
Anheuser-Busch InBev SA/NV (BUD - Free Report) , also known as AB InBev, is slated to release second-quarter 2018 results on Jul 26. In the last reported quarter, the company delivered negative earnings surprise of 7.6%.
In fact, the company has reported earnings miss in eight of the last nine quarters. It recorded an average negative surprise of 7.7% in the trailing four quarters. The Zacks Consensus Estimate for the second quarter is pegged at $1.05 per share, reflecting year-over-year growth of 10.5%. However, estimates witnessed a downtrend in the last seven days.
Anheuser-Busch InBev SA/NV Price and EPS Surprise
Anheuser-Busch InBev SA/NV Price and EPS Surprise | Anheuser-Busch InBev SA/NV Quote
Analysts polled by Zacks anticipate total revenues of $13.9 billion, which reflects a decline of 2.1% year over year. Nonetheless, the company has delivered positive sales surprise in four of the last six quarters, including consecutive beats in the last two quarters. While solid sales growth and synergies from cost savings continue to aid results, higher marketing expenses remain a deterrent.
How Things are Shaping Up For This Announcement
As mentioned above, the company’s dismal earnings trend is a major concern for the stock. Despite the solid sales in the first quarter, we note that volumes were strained due to the decline in non-beer volumes. This stemmed mainly from the weakness in Brazil and Peru. Soft volumes, higher cost of sales and increased marketing expenses were the key deterrents in the company’s otherwise strong quarter, which reflected solid sales growth and margin expansions. Moreover, the company is witnessing volatility in certain key markets, which should continue to weigh upon results.
Nonetheless, the company anticipates delivering strong top-line and EBITDA growth for 2018, backed by solid brand performances and robust commercial plans. It also expects accelerated growth through the rest of 2018, particularly in the second half. Moreover, we believe, AB InBev is poised to grow in the long run, driven by the strength of the Budweiser brand and robust initiatives.
AB InBev’s robust brand portfolio and a solid geographical reach remain strengths. Further, given the rising demand for craft beer space, we expect the company to benefit from its constant expansion in this category. Also, it keeps introducing near-beer alternatives, along with no- and low-alcohol beers, which is encouraging.
Additionally, the company remains well on track with the SABMiller integration. It expects synergies and cost savings of nearly $3.2 billion from the integration, which are expected to be realized in four years from the closing of the acquisition (or by October 2020).
Though the company holds a mixed view for the upcoming results, the stock has improved 5.9% in the past month, outperforming the industry’s gain of 1.9%. This reflects an optimistic investor sentiment for the stock, ahead of the earnings release.
What the Zacks Model Unveils
Our proven model does not conclusively show an earnings beat for AB InBev this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
AB InBev’s Earnings ESP of 0.00% and Zacks Rank #4 (Sell) make surprise prediction inconclusive.
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:
The Boston Beer Company, Inc. (SAM - Free Report) has an Earnings ESP of +13.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Monster Beverage Corporation (MNST - Free Report) has an Earnings ESP of +3.07% and a Zacks Rank of 3.
Brown-Forman Corporation (BF.B - Free Report) has an Earnings ESP of +0.52% and a Zacks Rank #3.
Today's Stocks From Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>