BUD Riser?

For Thomas' preview heading into the Anheuser-Busch conference call, please click here.

Anheuser-Busch (BUD - commentary - Cramer's Take) reported EPS of 95 cents vs. an expected 93 cents and 87 cents last year. One cent came from the sale of a Spanish amusement park.

U.S. beer sales were up 4.5% domestically. Volume rose 0.5% domestically and 4.8% internationally, for a 1.2% gain. Equity partner brands were up 2.1%, for a 1.4% overall gain. Sales were very strong leading up to the July Fourth weekend and Bud Light Lime, which is now 1.5% of industry volume, was a big reason why management believes that the company has recently gained a point of market share. Bud Light Lime is also being priced at a 50% premium to Bud Light at retail, so mix was a positive. Revenue per barrel was up 3.2% in the quarter.

Cost of goods sold rose 4.9%, which is consistent with the cost squeeze for other consumer staples. Marketing general and administrative costs also rose 4.9%, while pretax income rose 2%.

The tax rate fell 350 basis points, to 36%, as there were lower taxes on foreign earnings and a lower rate from the effect of stock option exercise as well. Without the park sale, second quarter net income and diluted EPS increased 3.3% and 9.2%, respectively. There were 5% fewer outstanding shares.

July month-to-date sales are strong, and the dividend was increased 12%, to 37 cents.

Guidance for the remainder of 2008 was for revenue per barrel to increase 4%. The gross margin is to increase slightly for the year of 2008. SG&A is to increase less than revenue per barrel.

An average of a 4% price increase will be implemented in the September to October period. This price increase has been moved up because of the cost increases the company has been seeing. Management believes that a 4% price increase is relatively moderate vs. the price increases that other food/beverage products companies have been making. The price elasticity ratio is still believed to be about 0.3. Sub-premium is still losing share to the premium segment.

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At the time of publication, Thomas had no positions in the stocks mentioned.