Anheuser-Busch (BUD) Updates Q3 Operations Outlook

October 3, 2008 8:33 AM EDT

Anheuser-Busch Cos. Inc. (NYSE: BUD) announced today that it achieved good U.S. beer volume growth in Q3. Driven by the successful national introduction of Bud Light Lime, U.S. beer shipments-to-wholesalers increased 2.3% for Q3, with sales-to-retailers for the quarter up 3.6%.

In addition, the pricing environment in the U.S. beer market continues to be favorable. Management expects revenue per barrel to increase nearly 4% in Q3, including favorable brand mix. As planned, implementation of the company's 2009 price increase plan was initiated in the latter half of September. By October 1, Anheuser-Busch had taken pricing actions covering over 85% of the company's U.S. beer volume.

Commodity cost pressures continue but are being mitigated by the company's Blue Ocean cost savings initiatives. Cost of goods sold per barrel for the U.S. beer company is expected to increase slightly less than revenue per barrel in Q3, yielding gross margin expansion in the period.

The company's international beer operations are also performing well. International beer operations volume is expected to be up mid-single digits in Q3 with pretax profits up over 20% (excludes equity income).

Packaging segment pretax income in Q3 is expected to be up in the mid-teens, while entertainment profits are expected to be down somewhat.

Anheuser-Busch Companies, Inc., through its subsidiaries, engages in the production and distribution of beer in the United States and internationally.

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