Long a Wall Street darling for churning out double-digit earnings per share quarter after quarter, Anheuser-Busch Cos. (BUD) has fallen on flatter times as it duels to defend its market share against rival Miller and increasing consumer thirst for wine and distilled spirits.

The St. Louis-based producer of top-selling Budweiser and Bud Light (search) saw its shares sink nearly 4 percent on Wednesday, a day after the nation's biggest brewer warned that its profit outlook for the year would be lower on weaker-than-expected U.S. beer volume in the first quarter.

Shaving its earnings forecast for the second time since February, Anheuser-Busch said its 2005 profits would grow in the low single digits.

Wall Street, which once considered Anheuser-Busch a darling for its earnings consistency, continued its pullback on the company's stock, already having been repeatedly downgraded in recent months.

Legg Mason on Wednesday cut its recommendation of the company's stock from "hold" to "sell." And just a week after lowering his rating of Anheuser-Busch stock from "outperform" to "peer perform," Bear Stearns' Carlos Laboy said the brewer's latest lowering of expectations "realized our worst fears."

"We are worried about lack of traction on the innovation front: this raises the difficulty for A-B to get pricing at year end. Without volume or pricing, the A-B growth algorithm simply collapses," Laboy said in a research note. "If it's going to continue growth, A-B's risk tolerance for transactions may well have to rise."

A week earlier, Laboy said he projects the U.S. beer market's softness, dating to early 2003, "will continue into 2005 with no clear end in sight." And "with the competitive landscape tough and industry trends weak, pricing increases will be more difficult" for Anheuser-Busch, he said.

Anheuser-Busch's shares fell $1.79, or 3.8 percent, to close at $45.65 on Wednesday on the New York Stock Exchange, below its previous 52-week low of $46.95.

"There's nothing big that hit the fan" with Anheuser-Busch, said Juli Niemann, an analyst with RT Jones Capital Equities here. "There really are no big surprises. A-B has been hit with price pressure, and the market is not growing. That's why the stock has been eroding."

Anheuser-Busch now expects earnings for the January-March period of 63 cents to 64 cents per share, excluding a one-time gain on the sale of its equity interest in a Spanish theme park.

The company earned 66 cents per share during last year's first quarter, and analysts surveyed by Thomson Financial forecast earnings of 64 cents per share on $3.58 billion in revenue.

For all of 2005, the company said it believes that earnings-per-share growth in the low-single-digit range — before stock option expenses and one- time items in both years — "is a reasonable expectation at this time."

Anheuser-Busch, scheduled to release first-quarter earnings April 27, said first-quarter sales to wholesalers slid 2.7 percent from last year's 24.4 million barrels. Domestic beer wholesaler sales to retailers slipped 1 percent, given generally weak industry volume conditions and the comparison with the previous year's strong showing of low-carb Michelob Ultra (search), the company said.

Patrick Stokes, Anheuser-Busch's president and chief executive, said that while the company has stepped up its new product, packaging and marketing efforts, "it will take time for these new initiatives to gain traction."

"Given Anheuser-Busch's substantial competitive strengths in the U.S. beer market, we are confident the company will successfully restore its volume momentum," said Stokes.

Benj Steinman of Beer Marketer's Insights Inc. said that Anheuser-Busch last year lost two-tenths of a percentage point in U.S. market share — to 49.4 percent — while Milwaukee-based rival Miller Brewing Co. (search) gained one-tenth of a point to 18.5 percent, aggressively exchanging blows with Anheuser-Busch in marketing along the way.

To Steinman, Miller's gain is significant in that its last market-share improvement was in 1999, largely because it acquired some brands from Pabst.

"You've got a dogfight where everyone's fighting like hell for a piece of a pie that's not growing," Steinman said.

Import brews grew at just a 1.4 percent clip last year. Steinman said imported beers accounted for 11.6 percent of the U.S. market in 2004.

Still, Anheuser-Busch isn't enduring the industry slump alone. Last month, London-based SABMiller PLC — Miller's corporate parent — suggested that Miller's beer sales were off slightly in this year's first two months.

As wine and distilled spirits continue to gain bigger shares of the alcoholic beverage market, Anheuser-Busch in recent months has bumped up its marketing in hopes of boosting its volume of U.S. beer shipments.

In February, Anheuser-Busch nationally launched Budweiser Select, a low-carb, low-calorie cousin of Budweiser and Bud Light with a darker color and crisper finish.

A month earlier, Anheuser-Busch rolled out B-to-the-E to go head-to-head with classic mixed drinks — traditional suds spiked with caffeine, fruit flavoring, herbal guarana and ginseng. That new brew came as Anheuser-Busch and other beermakers seek to piggyback strides liquor companies have made in luring young consumers to flavored and mixed drinks.

On Thursday, Anheuser-Busch expects to announce its launch of a watermelon-spiked addition to its Bacardi Silver lineup of liquor-branded flavored malt beverages, which already include versions of black cherry orange, raspberry and lemon.