We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
AB InBev (BUD) Lags on Q3 Earnings & Sales, Retains View
Read MoreHide Full Article
Anheuser-Busch InBev SA/NV (BUD - Free Report) , also known as AB InBev, reported lower-than-expected earnings and revenues in third-quarter 2018. Notably, the company reported earnings miss in eight out of the 10 preceding quarters. However, revenues missed estimates after three straight quarters of recording a beat.
Overall, shares of AB InBev have declined 18.9% in the past month, wider than the industry's fall of 12%.
Q3 Highlights
Normalized earnings per share of 82 cents declined 37.4% year over year from $1.31 in the year-ago quarter. The bottom line also lagged the Zacks Consensus Estimate of 86 cents. The company gained from improving trends in key markets and continued premiumization in the majority of its markets.
Anheuser-Busch InBev SA/NV Price, Consensus and EPS Surprise
Revenues declined 9.9% to $13,282 million and missed the Zacks Consensus Estimate of $13,744 million. However, the company registered organic revenue growth of 4.5%, courtesy of 4.4% rise in revenues per hectoliter (hl) on a constant-geographic basis. The increase stemmed from ongoing revenue management initiatives along with strong performance of premium brands. Further, revenues per hl advanced 4.2% on a reported basis.
Consolidated revenues at the company’s three global brands — Budweiser, Corona and Stella Artois — improved 7.7% globally and 10.6% outside home markets.
Total volume advanced 0.2%, with own-beer volume rising 0.5% while non-beer volume declined 2.4%. Own-beer volume gained from growth in Europe, Mexico and many African markets, partly mitigated by softness in Brazil and Argentina.
The cost of sales declined 10.2% year over year to $4,982 million while the same rose 6.3% organically. Further, cost of sales per hl grew 5.9% both organically and on a constant-geographic basis. The increase was driven by higher commodity prices, partly negated by synergy capture.
The company’s normalized earnings before interest, taxes, depreciation and amortization (EBITDA) were $5,358 million, declined 6.5% year over year but improved 7.5% on an organic basis. The increase in organic EBITDA was driven by solid growth in organic revenues, as well as gains from cost synergies and savings, partly negated by higher commodity prices. EBITDA margin expanded 140 basis points (bps) to 40.3% while the same increased 116 bps organically.
Outlook
AB InBev issued guidance for 2018. Though management sees volatility in certain key markets, it anticipates delivering strong top line and EBITDA growth for the year, backed by solid brand performance and robust commercial plans. Driven by increased focus on category development, the company expects net revenue per hl growth to exceed inflation while costs are expected to come below inflation. Moreover, premiumization and revenue management initiatives are likely to aid revenues per hl growth.
Further, this Zacks Rank #5 (Strong Sell) company reiterated synergy and cost-savings guidance at $3.2 billion that was announced in August 2016. Of this, nearly $547 million was reported by SABMiller as of Mar 31, 2016, and about $2,174 million captured between Apr 1, 2016, and Jun 30, 2016. The company expects to achieve remaining synergies of nearly $500 million by October 2020.
For 2018, management anticipates normalized effective tax rate of 24-26%. Net capital expenditure is projected between $4 billion and $4.5 billion. AB InBev envisions dividend growth to be modest in the near term due to increased importance of deleveraging. However, dividends are likely to grow gradually in the long term.
Archer Daniels delivered an average positive earnings surprise of 18.6% in the last four quarters. Moreover, the stock has surged 19.1% year to date.
Helen of Troy has rallied 28.5% year to date. It has a long-term earnings growth rate of 6%.
Chefs' Warehouse has a long-term earnings growth rate of 19%. Moreover, the stock has rallied 59.4% year to date.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
AB InBev (BUD) Lags on Q3 Earnings & Sales, Retains View
Anheuser-Busch InBev SA/NV (BUD - Free Report) , also known as AB InBev, reported lower-than-expected earnings and revenues in third-quarter 2018. Notably, the company reported earnings miss in eight out of the 10 preceding quarters. However, revenues missed estimates after three straight quarters of recording a beat.
Overall, shares of AB InBev have declined 18.9% in the past month, wider than the industry's fall of 12%.
Q3 Highlights
Normalized earnings per share of 82 cents declined 37.4% year over year from $1.31 in the year-ago quarter. The bottom line also lagged the Zacks Consensus Estimate of 86 cents. The company gained from improving trends in key markets and continued premiumization in the majority of its markets.
Anheuser-Busch InBev SA/NV Price, Consensus and EPS Surprise
Anheuser-Busch InBev SA/NV Price, Consensus and EPS Surprise | Anheuser-Busch InBev SA/NV Quote
Revenues declined 9.9% to $13,282 million and missed the Zacks Consensus Estimate of $13,744 million. However, the company registered organic revenue growth of 4.5%, courtesy of 4.4% rise in revenues per hectoliter (hl) on a constant-geographic basis. The increase stemmed from ongoing revenue management initiatives along with strong performance of premium brands. Further, revenues per hl advanced 4.2% on a reported basis.
Consolidated revenues at the company’s three global brands — Budweiser, Corona and Stella Artois — improved 7.7% globally and 10.6% outside home markets.
Total volume advanced 0.2%, with own-beer volume rising 0.5% while non-beer volume declined 2.4%. Own-beer volume gained from growth in Europe, Mexico and many African markets, partly mitigated by softness in Brazil and Argentina.
The cost of sales declined 10.2% year over year to $4,982 million while the same rose 6.3% organically. Further, cost of sales per hl grew 5.9% both organically and on a constant-geographic basis. The increase was driven by higher commodity prices, partly negated by synergy capture.
The company’s normalized earnings before interest, taxes, depreciation and amortization (EBITDA) were $5,358 million, declined 6.5% year over year but improved 7.5% on an organic basis. The increase in organic EBITDA was driven by solid growth in organic revenues, as well as gains from cost synergies and savings, partly negated by higher commodity prices. EBITDA margin expanded 140 basis points (bps) to 40.3% while the same increased 116 bps organically.
Outlook
AB InBev issued guidance for 2018. Though management sees volatility in certain key markets, it anticipates delivering strong top line and EBITDA growth for the year, backed by solid brand performance and robust commercial plans. Driven by increased focus on category development, the company expects net revenue per hl growth to exceed inflation while costs are expected to come below inflation. Moreover, premiumization and revenue management initiatives are likely to aid revenues per hl growth.
Further, this Zacks Rank #5 (Strong Sell) company reiterated synergy and cost-savings guidance at $3.2 billion that was announced in August 2016. Of this, nearly $547 million was reported by SABMiller as of Mar 31, 2016, and about $2,174 million captured between Apr 1, 2016, and Jun 30, 2016. The company expects to achieve remaining synergies of nearly $500 million by October 2020.
For 2018, management anticipates normalized effective tax rate of 24-26%. Net capital expenditure is projected between $4 billion and $4.5 billion. AB InBev envisions dividend growth to be modest in the near term due to increased importance of deleveraging. However, dividends are likely to grow gradually in the long term.
Three Hot Picks in the Consumer Staples Space
Some better-ranked stocks in the broader consumer staples sector include Archer Daniels Midland Company (ADM - Free Report) , Helen of Troy Limited (HELE - Free Report) and The Chefs' Warehouse, Inc. (CHEF - Free Report) , each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Archer Daniels delivered an average positive earnings surprise of 18.6% in the last four quarters. Moreover, the stock has surged 19.1% year to date.
Helen of Troy has rallied 28.5% year to date. It has a long-term earnings growth rate of 6%.
Chefs' Warehouse has a long-term earnings growth rate of 19%. Moreover, the stock has rallied 59.4% year to date.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>