AB InBev Misses Earnings Estimates

Anheuser-Busch InBev reported a growth in profit that trailed Wall Street estimates as China and Europe weakness compounded the inability of the brewer to stem dropping sales in its largest market, the United States.

Shares of the company dropped after the maker of Budweiser said its adjusted earnings prior to taxes, interest, amortization and depreciation were up by 1.3%. That compared to a growth of 7% expected by Wall Street analysts.

AB InBev now joins rivals like SABMiller and Heineken, along with Diageo the spirits maker, in coming up short of analyst estimates during the period as consumers lower their spending in emerging and developing markets.

While softness in Europe is nothing new, China is a particular sore area over the most recent months as the economy is slowing which hinders everyone from Nestle the food maker, to Burberry the coat maker.

The growth in earnings by AB InBev was its slowest since the first three months of 2013. The company said the quarter was just a one-off type in terms of performance in profit and not any indicator of the entire year.

The largest brewer in the world repeated that it is still anticipating that the U.S. industry volumes will improve, even though CFO Felipe Dutra announced that the most recent quarter was softer than they had expected in the biggest region for the company.

AB InBev was down by up to 3% in trading on Friday in Brussels and down by 2.7% in early London trading. That cut the gain for the year back to about 10% and lowered the market value of the brewer by close to 4 billion euros to approximately $136 billion euros.

Sales in the U.S. to wholesalers were down by 3.7%. Sales to U.S. retailers were off by 1.3% for the majority of the shortfall in profit during the quarter.

The U.S. market share for the beer maker was down by 30 basis points during the quarter. This was driven for the most part by Budweiser, which is not where the company wants it.

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