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Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition

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- By James Li

Shares of Anheuser-Busch InBev SA/NV (NYSE:BUD) surged over 6% in morning trading on Thursday following the release of its first-quarter earnings results and the announcement of its CEO transition.

For the quarter ending March 31, the Belgian beer giant reported net income of $1.099 billion, or 55 cents in earnings per share, compared with net income of $1.015 billion, or 51 cents in earnings per share, in the prior-year quarter. Adjusted earnings of 51 cents per share topped the consensus estimate of 48 cents per share.


Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition
Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition

Company reports strong revenue growth to start 2021

Anheuser-Busch reported revenue of $12.293 billion, up 17.2% from prior-year quarter revenue on the back of strong growth in beer volumes. Total volume growth of 13.3% reflects company own-beer volume growth of 14.9% and non-beer growth of 4%, driven by strong growth in premium beer products, including Budweiser and Stella Artois.

Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition
Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition

GuruFocus ranks the company's profitability 7 out of 10 on the back of operating margins outperforming 88% of global competitors despite returns and three-year-average revenue and earnings growth rates underperforming more than 65% of global competitors.

Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition
Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition

Company taps leader of North America operations as new CEO

Current Anheuser-Busch CEO Carlos Brito announced that he is stepping down from the company effective July 1, handing the top executive position to Michael Doukeris, head of Anheuser-Busch's North American operations. CNBC added that the CEO transition allows investors to "reformulate views" on a company that is "[starting] a positive transition" according to an analyst note from Barclays.

Shares of Anheuser-Busch traded around of $75.03, up 6.24% from the previous close of $70.62. The stock is fairly valued based on Thursday's price-to-GF Value ratio of 0.94.

Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition
Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition

GuruFocus ranks Anheuser-Busch's financial strength 3 out of 10 on several warning signs, which include a low Altman Z-score of 1.04 and interest coverage and debt ratios that underperform over 87% of global competitors.

Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition
Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition

Gurus with large holdings in Anheuser-Busch include Ken Fisher (Trades, Portfolio)'s Fisher Investments, Jim Simons (Trades, Portfolio)' Renaissance Technologies and Charles Brandes (Trades, Portfolio)' Brandes Investment.

Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition
Anheuser-Busch Rises on 1st-Quarter Earnings Beat and CEO Transition

Disclosure: No positions.

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This article first appeared on GuruFocus.