- Anheuser-Busch InBev reported a 45% drop in net profit for the third quarter, falling to $1.38 billion from $2.5 billion a year earlier. The decrease was attributed to currency volatility and a rise in net finance costs.
- Revenue decreased to $11.38 billion from $12.24 billion, which missed Wall Street estimates, but organic revenue, which removes the effects of currency headwinds, increased by 7.9%, the fastest pace in six quarters. Sales in the U.S. rose 2.8%, helped by pricier beers like Stella Artois and Goose Island.
- AB InBev’s board also approved an interim per-share dividend of €1.60 ($1.76) for fiscal 2015, a cut above the €1 ($1.10) dividend AB InBev paid in 2014.
One of the biggest focuses for AB InBev continues to be its takeover bid for SABMiller, as it must enter a final offer by Nov. 4 after twice extending the deadline. The deal doesn’t hinge on any asset sales that antitrust regulators may require for the deal to go through, AB InBev CFO Felipe Dutra said on a call. Dutra also said that "banks are ready with financing, though the brewers are still finalizing commitments from shareholders regarding the offer," according to Bloomberg. If the deal goes through, the combined companies could control nearly one-third of the global beer market.
As for the earnings report, the company said that pushing premium beers will boost sales above its forecast, which "will more than offset a corresponding increase in costs caused by pushing pricier brews," Bloomberg reported.
However, AB InBev is still dealing with currency headwinds, which are knocking out profits.
"Considering approximately 70% of AB InBev’s top-line comes from markets outside the U.S., the strengthening U.S. dollar against certain foreign currencies is dealing a blow to the brewer’s financials. Currency was an 11 percentage point headwind on the net sales in the last quarter," Trefis Team wrote in an earnings preview in Forbes.
To respond to a drop in domestic and light beers, AB InBev has launched a variety of marketing campaigns for these beers, including a new campaign for Bud Light to target beer drinkers beyond the millennials the brand targeted in its previous campaign. Bud Light has also taken a step into e-commerce and the the Internet of Things market with a smart beer fridge, the Bud-E Fridge.