AB Inbev Shares Pop On Revenue Beat, Altria Recommitment

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AB Inbev Shares Pop On Revenue Beat, Altria Recommitment
Credit: © Reuters.

by Daniel Shvartsman

Investing.com -- Anheuser Busch Inbev (NYSE: BUD ) stock popped in premarket trading and European trading (Anheuser Busch Inbev SA NV (BR: ABI )) after the company reported a big beat on topline estimates for its Q3 earnings report, and after Altria Group (NYSE: MO ) announced they had no plans to sell their stake in Anheuser Bud.

The beverage producer posted earnings of $0.12/share / $0.50/share non-GAAP, and revenue of $14.27 billion, vs. estimates of $.65/share and $13.67 billion. The company’s revenues grew 7.9% from last year and outpaced its pre-pandemic numbers. Pricing drove over half the growth, with revenue per hectoliter up 4.3% over the last 12 months.

“During the third quarter, we delivered top- and bottom-line growth versus both 2020 and pre-pandemic levels of 2019 driven by relentless execution, investment in our brands and accelerated digital transformation," said CEO Michel Doukeris in the press release. “As a result of our performance and our continued momentum we are raising the bottom-end of our EBITDA guidance.”

Anheuser Busch suspended its interim dividend during the pandemic as it focused on handling uncertainty and on deleveraging. The company said that its proposal about a full year 2021 dividend will be announced with the Q4 results in February.

The company’s current guidance for 2021 is for 10-12% EBITDA growth with faster revenue growth, vs. 8-12% EBITDA growth guidance on their previous call.

The Altria Group news may be a bigger factor for the cpmpany. Altria owns approximately 10% of BUD from the merger with SAB Miller in 2016, and the bulk of its shares lost their lock-up restriction this month. Altria took an impairment on the carrying value of those shares, but said, “Altria currently plans to maintain its ABI investment. Altria continues to have confidence in ABI’s (i) long-term strategies; (ii) premium global brands; (iii) experienced management team; and (iv) capability to successfully navigate near-term challenges.”

BUD shares are trading up nearly 9% pre-market at $62.2/share, still 22% off of 52-week highs and about half of the heights at the time of the SABMiller deal.

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