Anheuser-Busch Talks Up 2006

It sees a return to pricing power.
Author:
Publish date:

Anheuser-Busch

(BUD) - Get Report

reiterated full-year earnings guidance of $2.42 to $2.45 a share Tuesday and said profit growth should resume in 2006.

Analysts expect the brewer to earn $2.44 a share on sales of $15.026 billion this year, according to Thomson First Call. The consensus estimate had been $2.55 a share before Anheuser

issued a profit warning last month.

The stock is down 11% this year despite a high-profile investment by Warren Buffett.

"With market share and volume trends now improving, our objectives for 2006 include achieving balanced volume and revenue per barrel growth and stimulating category growth," the company said Tuesday.

"Clearly, Anheuser-Busch has experienced significant challenges in 2005, but the company's substantial competitive advantages in domestic beer provide a strong foundation for long-term success and the company is well positioned in international beer for long-term growth through our important positions in China and Mexico," it said.

The Budweiser parent noted that it plans to raise prices and reduce markdowns in early 2006 and "considers the domestic beer pricing outlook to be favorable for next year. While cost pressures are expected to continue, we expect to return to earnings per share growth in 2006," the company said.

The stock closed at $44.01 Monday, about 18 times this year's Thomson First Call consensus earnings estimate and 17.3 times next year's estimate.