UPDATE 2-Brewer AB InBev softens Q3 miss with share buyback, guidance raise
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Rewrites paragraphs 1-2, adds analyst in 6, Heineken comparison in 12
By Emma Rumney
LONDON, Oct 31 (Reuters) - Anheuser-Busch InBev ABI.BR reported on Thursday third-quarter profits, revenues and volumes all well behind forecasts, but looked to soften the blow with a $2 billion share buyback.
The world's largest beer maker also raised its full-year core earnings guidance despite selling less beer in markets like the United States, Mexico, Europe and China, with the latter seeing double-digit declines in quarterly volumes and revenues.
Major beer and spirit makers have all seen softer demand in recent months amid struggling economies, bad weather and stiffer competition from lower priced rivals around the world.
"Our teams and partners continue to execute our strategy and we are confident in our ability to deliver", CEO Michel Doukeris said in a statement, adding AB InBev now expected full-year organic core profit (EBITDA) growth of between 6% and 8%, versus 4-8% previously.
The maker of Stella Artois and Budweiser beer's share buyback will also be cheered by investors whose expectations for a fresh return of capital had been growing amid AB InBev's strong performance and growing free cash.
"The number is higher than most hoped for," Bernstein analyst Trevor Stirling said in a note, adding the buyback would be spread over 12 months and shares would be used for stock-based compensation, limiting its positive impact.
KEY MARKETS DECLINE
AB InBev reported 7.1% organic EBITDA growth for the third quarter, versus analyst expectations for 8.6% growth, helped by factors like cost cutting.
Its revenues and volumes, meanwhile, saw a 2.1% rise and 2.4% decline respectively, compared to analyst forecasts for a 3.4% increase and 0.4% decline.
In its largest market, the United States, AB InBev sold less beer, but analysts said its performance was better than expected.
It also saw low single digit volume declines in Mexico and Europe, also large territories for sales, amid adverse weather and softer consumer demand.
Revenues and volumes were down 16.1% and 14.2% respectively in China, with AB InBev flagging particular weakness in sales in venues such as bars and restaurants.
Rival Heineken HEIN.AS reported third quarter revenues slightly ahead of expectations last week, but also flagged challenging consumer and industry trends.
(Reporting by Emma Rumney; Editing by Lincoln Feast and Mark Potter)
((Emma.Rumney@thomsonreuters.com; +447391409253;))