Anheuser-Busch Brews Up Strong Q4 Profit

Anheuser-Busch Cos. Inc. , the world's No. 1 brewer, Wednesday posted a 9 percent climb in fourth-quarter profit amid strong U.S. beer results and increased its earnings view for the year.

The company, with top-selling beers like Bud Light, Budweiser and Michelob, said it earned $228 million, or 26 cents per share, compared with $209 million, or 23 cents a share, a year earlier. Analysts had expected Anheuser-Busch to earn 26 cents per share, according to Thomson Financial/First Call.

"Operating income was up 9.5 percent, which is outstanding," Prudential Securities analyst Jeff Kanter said. "It was a solid quarter across the board."

"In a difficult economic environment, Anheuser-Busch continues to realize dependable earnings growth, and has now achieved 13 consecutive quarters of strong double-digit earnings-per-share growth," Chairman August Busch III said in a statement.

Busch said the company still expects double-digit earnings-per-share growth going forward. It now targets 2002 earnings-per-share growth at 10 percent to 12 percent, up from a previous expectation of 10 percent growth for the year.

Net sales, which include the impact of excise taxes, rose to $2.89 billion from $2.84 billion. Gross sales, which exclude excise taxes, climbed to $3.37 billion from $3.31 billion.

Revenues fell at the recycling unit due to aluminum prices and at the entertainment unit due to lower theme park attendance, but those are small parts of its overall results.

St. Louis-based Anheuser-Busch last month said domestic wholesaler sales to retailers jumped 5 percent in the fourth quarter, boosted by unseasonably warm weather, an extra selling day in the quarter and strong sales over the holiday period from Thanksgiving to New Year's.

Busch said the earnings were also driven by the company's international beer segment, through the strong performance of equity partner Grupo Modelo, Mexico's largest brewer, and volume and profit increases for Anheuser-Busch product sales overseas.

Anheuser-Busch instituted price increases in markets representing just over 40 percent of its domestic volume in October 2001 and is currently taking prices higher on about another 25 percent of domestic volume.

The company said initial results of its pricing actions are "encouraging."

ABN Amro beverage analyst Mark Swartzberg said the increased earnings-per-share guidance and the comment that its latest round of pricing increases is being well received were the two main new positives since the strong U.S. results were announced back in January.

The company in a conference call said it sees no real threat of an excise tax increase on the federal level.

The company said there is a bill in Congress to roll back a federal excise tax which was doubled in 1991, but thinks it is unlikely to happen given the current budget situation.

On the state level, Anheuser-Busch said it is seeing more excise tax increase proposals. The company said it is "well prepared" to address issues in any states that might raise those taxes.

Anheuser-Busch also said it would not consider any acquisitions outside the beer business.

Shares of Anheuser-Busch have been on a relatively steady climb since mid-October and tapped a new 52-week high of $48.40 Tuesday. The shares fell 5 cents to $48.20 in Wednesday trading after dipping as low as $47.70 earlier in the session.

Analysts were not concerned about the share price drop.

"It's just a bad day for consumer staples, they're all down," Kanter said.