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Bad weather, new brewery blamed for A-B first quarter drop.

Anheuser-Busch said last week it expects a disappointing first quarter due to reduced shipping, severe weather and a continued weak economy. The disclosure helped knock down the price of A-B stock, which closed off $2.25 to $51.75 on the New York Stock Exchange.

Earnings per-share will be down about 7 percent to an indicated $.69 a share. Last year at this time, the company had net income of $224 million, or $.77 a share on sales of $2.62 billion.

Part of the dip is attributable to the brewer's new Cartersville, GA., operation that will increase output during the warmer months.

The additional capacity provided by the new brewery will eliminate the need to stockpile wholesaler inventories early in anticipation of the summer months as A-B had done in past years. That practice usually boosted first-quarter sales figures.

The weather played a key role in the first-quarter decline too, with a major blizzard that hit the east the weekend before St. Patrick's Day, a key time for beer sales.

Heavy rains also hit California earlier this year, keeping consumers indoors. California accounts for about 15 percent of Anheuser-Busch's sales.

Sales to retailers, which A-B said is a better indicator of underlying consumer demand than sales to wholesalers, will be down about 2 percent for the first quarter.

Sales to wholesalers should climb by 1 percent for the full year and the brewer remains "committed to achieving our goal of double digit earnings per share growth objective for the year," said Jerry Ritter, executive vice president, chief financial and administrative officer.

While it is too early to express a "comfort level" with Wall Street expectations, Ritter said a minimum increase of 10 percent would put Anheuser-Busch's operating earnings at about $3.82 a share. Industry analysts had projected $3.89 to $3.95 a share before the company's announcement last week.

Despite the weather, Anheuser-Busch still managed to increase barrels shipped by 1 percent as it reported record earnings of $917.5 million, or $3.22 a share, on sales of $13.1 billion.

Economic woes continue to beset the already flat beer industry, as key markets in the east, midwest and California show little sign of recovery. Not only were general beer sales down, but many consumers opted for less expensive brands.
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Title Annotation:Anheuser-Busch Company Inc's 1st qtr 1993 report
Publication:Modern Brewery Age
Date:Mar 29, 1993
Words:384
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