BUD - What to expect from earnings tomorrow.
Anheuser-Busch InBev SA/NV, alias AB InBev, is slated to release third-quarter 2017 results on Oct 26. Last quarter, the company delivered a negative earnings surprise of 16.7%.
In fact, AB InBev has reported negative surprises in the trailing four quarters, with an average miss of 32.8%. Let’s see how things are shaping up prior this announcement.
What to Expect?
Analysts polled by Zacks expect AB InBev to register a significant improvement in the top and bottom lines during the third quarter. With estimates showing an upward revision of 31 cents in the past 30 days, the Zacks Consensus Estimate is currently pegged at $1.50. This exhibits a year-over-year increase of 81% against a decline of more than 10% witnessed in the preceding quarter.
Total revenue is also anticipated to surge 39% to $15.4 billion, following an increase of 31.2% in the second quarter.
Factors at Play
AB InBev is likely to benefit from its impressive brand portfolio, solid geographical reach and focus on business expansion. The company is well on track with SABMiller’s integration — which reinforced its presence in the brewing space — and realized synergies worth $335 million during second-quarter 2017.
The company also remains focused on portfolio diversification to resonate with consumers’ evolving drinking patterns. Given the accelerated shift toward low and no-alcohol products, AB InBev keeps introducing near beer alternatives, along with no- and low-alcohol beers to provide more choices to consumers.
AB InBev’s expansion in the craft beer space further highlights its practice of capitalizing on all the possible growth avenues. To make the most of this lucrative market, this Belgium-based brewer made numerous acquisitions to strengthen its position in the competitive craft beer space.
While all is well with AB InBev, the company delivered its sixth consecutive negative earnings surprise in second-quarter 2017. This can be attributed to weakness in Brazil, negative impact of mark-to-market adjustment and increased finance costs. Nevertheless, with Brazilian economy on a path of recovery, it is likely to benefit the company going forward. However, analysts believe that total volume in the third quarter is likely to be impacted by hurricanes, which affected the two major beer states — Texas and Florida.
