AB InBev's shares fall as Q3 miss overshadows stock buyback
Q3 volumes slip in the US, Mexico, China
Q3 profits, volumes and revenues miss forecasts
Company announces $2 billion share buyback
FY profit guidance raised to 6%-8% growth
Rewrites paragraph 1 on shares; adds Carlsberg comparison in paragraph 12
By Emma Rumney
LONDON, Oct 31 (Reuters) -The world's largest beer maker Anheuser-Busch InBev ABI.BR reported third-quarter profits, revenues and volumes behind forecasts on Thursday, sending its shares almost 4% lower as a $2 billion share buyback failed to win over investors.
It narrowed its full-year core earnings guidance to the top end of its existing range, despite selling less beer in markets including the United States, Mexico, Europe and China. Quarterly volumes in the latter registered double-digit declines.
Major beer and spirit makers have all seen reduced demand in recent months in response to struggling economies, bad weather and 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 expected full-year organic core profit (EBITDA) growth of between 6% and 8%, versus 4-8% previously.
In view of increased amounts of free cash, expectations for a share buyback had been building among investors in the maker of Stella Artois and Budweiser beer. But the $2 billion on offer on Thursday, along with a guidance raise was not enough to distract the market from AB InBev's third quarter performance.
The company's shares fell 3.8% in early trade.
MAJOR MARKETS DECLINE
AB InBev reported 7.1% organic EBITDA growth for the third quarter, helped by cost-cutting, but analyst expectations were for 8.6% growth.
Its revenues and volumes 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.
Adverse weather and weaker consumer demand led volumes to decline by low single digits in Mexico and Europe, also large territories for sales.
Revenues and volumes were down 16.1% and 14.2% respectively in China, where AB InBev said sales in venues such as bars and restaurants was particularly weak.
Rival Carlsberg CARLb.CO also reported lower beer volumes in China, France and the United Kingdom on Thursday. Heineken HEIN.AS flagged challenging consumer and industry trends last week.
Reporting by Emma Rumney; Editing by Lincoln Feast, Mark Potter and Barbara Lewis
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