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A-B Takes a Dive in 3rd Qtr. Profits

Oct 27, 2005 - Anheuser-Busch Cos. Inc., said Wednesday its third-quarter profit fell 24 percent due to cost pressures, competition from other alcoholic drinks and costs associated with the legal settlement with the Maris family distributorship in Florida.

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Excluding the one-time litigation settlement, the company said it would have earned $623 million, or 78 cents per share.

A-B earned $518 million, or 66 cents per share, for the period ending Sept. 30. That's a decrease of 24 percent from the same period last year when net income was $684 million, or 85 cents per share.

Shares of Anheuser-Busch fell 95 cents, or 2.3 percent, to close at $40.80 on the New York Stock Exchange, its lowest point in nearly four years.

A-B has been struggling this year for the first time in decades. Intense competitive pressure from rival Miller Brewing Company and a stagnate beer market in the major-brand category has put unusual pressure on the St. Louis brewers sales.

Some analysts even suggested that A-B's woes stem in part from its inability to capture the specialty beer drinker.

Analyst Carlos Laboy of Bear Stearns & Co. Inc. in New York said in his fiancial summary of A-B that the brewer has stayed away from a "key growth market for beer companies - high-end microbrews that come in different flavors and command higher prices at the bar." Anheuser-Busch "remains steadfast that the Budweiser family can be all things to all people," Laboy and others wrote in a pessimistic report on the company's future earnings potential.


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