Anheuser-Busch previews strong third quarter results

Anheuser-Busch Cos. Inc. announced that it achieved good U.S. beer volume growth in the third quarter. Driven by the successful national introduction of Bud Light Lime, U.S. beer shipments-to-wholesalers increased 2.3% for the third quarter, with sales-to-
retailers for the quarter up 3.6%.
In addition, the pricing environment in the U.S. beer market continues to be favorable. Management expects revenue per barrel to increase nearly 4% in the third quarter, including favourable brand mix. As planned, implementation of the company's 2009 price increase plan was initiated in the latter half of September. By October 1, Anheuser-Busch had taken pricing actions covering over 85% of the company's U.S. beer volume.
Commodity cost pressures continue but are being mitigated by the company's Blue Ocean cost savings initiatives. Cost of goods sold per barrel for the U.S. beer company is expected to increase slightly less than revenue per barrel in the third quarter, yielding gross margin expansion in the period.
The company's international beer operations are also performing well. Volume is expected to be up mid-single digits inthe third quarter with pretax profits up over 20% (excludes equity income).
Packaging segment pretax income in the third quarter is expected to be up in the mid-teens, while entertainment profits are expected to be down somewhat.
Consolidated marketing, distribution and administrative expenses in the third quarter are expected to be up mid-single digits.
Consolidated pretax income in the third quarter is expected to be up low double-digits, excluding one time items. The company continues to expect equity income to decline for the full year.
In conjunction with the company's salaried workforce reduction initiative, as previously announced, the company expects to recognize in the third and fourth quarters of 2008 one-time pretax charges estimated in the range of $400-525 mln for enhanced retirement and severance costs, with associated cash expenditures of approximately $100-140 mln.