Anheuser-Busch affirms company's profit forecast for 2007

ST. LOUIS -- Officials at Anheuser-Busch Cos. Inc. said Thursday they still expect earnings per share growth between 7 percent and 10 percent this year, even as the cost of ingredients continue to climb and eat into profit margins.

The nation's biggest brewer will continue to offset its cost increases by raising beer prices, chief financial officer W. Randolph Baker told a group of stock analysts during a conference in New York.

Baker said consumers have accepted price increases on most products in 2007, which has kept the maker of Budweiser, Bud Light and Michelob in the black.

"Our object for the year was to find a way to cover [cost increases], and we did -- but just barely," Baker said.

Baker highlighted a bright spot for Anheuser-Busch -- an increase in consumer interest for domestic beers. Last year, beer industry shipment volume grew 2.1 percent, he said, the best annual performance since 1990. He said beer industry growth in 2007 has continued to exceed expectations, up 1.8 percent so far this year.

"We see the resurgence in interest in beer. With the momentum there, it's likely you're going to have strong demand for beer," Baker said.

Anheuser-Busch will boost advertising spending next year to strengthen demand for its flagship brands, Baker said.

Much of the spending will be made on national television ads, with spending increasing in the double digits in 2008 over this year, he said.

International beer sales have outpaced domestic sales, and Anheuser-Busch has been disappointed in its mainstay brand Bud Light, Baker said.

In the third quarter this year, revenue for the U.S. beer segment rose 2 percent, while revenue from international markets jumped 8 percent.

"The biggest priority is accelerating the growth of Bud Light, with a focus on improving our domestic beer profitability and performance," Baker said.

The company's stock price was $51.89 in early trading Thursday, unchanged from the day before.