Anheuser-Busch InBev (BUD), the world’s largest brewer, delivered a mixed bag of results in its third-quarter earnings report, leaving investors with a sense of cautious optimism. While the company beat analyst expectations on adjusted earnings per share, exceeding the 89-cent estimate with 98 cents, it missed on revenue, falling short of the projected $15.644 billion with $15.046 billion. Despite the revenue miss, Anheuser-Busch InBev highlighted positive trends in its business. Revenue increased by 2.1%, driven by robust growth in over 60% of its markets. This was attributed to a 4.6% rise in revenue per hectoliter, a measure of beer output, fueled by revenue management strategies and the ongoing premiumization of its product portfolio. The company also reported gaining or maintaining market share in 60% of its markets, with volumes increasing in half of them. However, overall volume performance was negatively impacted by a challenging consumer environment in China and Argentina, resulting in a 2.4% decline in total volumes. Despite the volume decrease, Anheuser-Busch InBev’s CEO Michel Doukeris expressed confidence in the company’s future prospects, stating, “Consumer demand for our megabrands and the execution of our mega platforms delivered another quarter of top- and bottom-line growth with margin expansion.” He emphasized the company’s commitment to its strategy and its ability to deliver on its raised FY24 EBITDA growth outlook of 6-8%. The company’s EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 7.1% during the quarter, driven by production cost efficiencies and disciplined overhead management. This resulted in an impressive 169 basis points expansion in EBITDA margin. Further bolstering investor confidence, Anheuser-Busch InBev announced a $2 billion share buyback program to be executed over the next 12 months. This move signifies the company’s belief in its own value and its commitment to shareholder returns. Looking ahead, Anheuser-Busch InBev has raised its 2024 outlook, now expecting EBITDA growth of 6%-8%, an improvement from the previous estimate of 4%-8%. The company also projects capital expenditures between $4 billion and $4.5 billion. Despite the strong earnings performance and positive outlook, BUD shares are trading lower on Thursday, indicating investor concerns about the global macroeconomic environment. The market remains cautious, and it remains to be seen whether the company’s performance will be enough to overcome the broader economic headwinds and drive sustained growth in the coming quarters.
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