Boston Beer Q3 Profit Up 24%, Results Beat View; But Lowers Full-year Outlook

(RTTNews) - Alcohol beverages maker Boston Beer Co. Inc. (SAM) on Wednesday reported a 24 percent increase in profit for the third quarter from last year, primarily reflecting higher shipments.

Both earnings per share and revenue for the quarter beat analysts' estimates. However, the company lowered its earnings outlook for fiscal 2013, citing a land write-down and increased brand investments.

The company's third-quarter net income was $25.69 million or $1.89 per share, up from $20.75 million or $1.53 per share in the year-ago quarter. On average, four analysts expected the company to earn $1.82 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net revenue for the quarter rose 30 percent to $216.41 million from $166.45 million in the corresponding quarter last year. Analysts had a consensus revenue estimate of $200.42 million for the quarter.

The increase in revenues were mainly due to core shipment volume growth of 29 percent to about 993,000 barrels. The increase in shipments were partly offset by increased investments in advertising, promotional and selling expenses and a write-down of land of $0.10 per share.

Depletions grew 26 percent from the prior-year period and and benefited from growth in the Samuel Adams beer, Twisted Tea malt beverage and Angry Orchard hard cider brands.

However, gross margin for the quarter declined to 53 percent from 56 percent in the year-ago period, reflecting increased brewery processing costs, higher ingredient costs and product mix effects.

For fiscal 2013, Boston Beer now forecasts earnings in a range of $5.05 to $5.35 per share, down from its previous forecast of $5.10 to $5.40 per share.

The revised outlook is due mainly to land write-down and increased brand investments, estimated to be partially offset by increased shipment volumes. Analysts expect the company to earn $5.34 per share for the year.

However, the company raised its forecast for full-year depletions growth to a range of 21 percent to 24 percent from the prior range of 17 percent to 22 percent, citing the current trends. The company also projects shipments growth for the year of between 21 percent and 24 percent.

In addition, Boston Beer maintained its full-year gross margin target of between 52 percent and 54 percent.

Boston Beer now projects fiscal 2013 capital spending in a range of $100 million to $120 million, compared to the prior range of $100 million to $140 million.

For fiscal 2014, Boston Beer forecast depletions and shipments percentage growth in the mid-teens, and gross margin between 52 percent and 54 percent. The company projects capital spending for the year between $140 million and $180 million, up from the prior range of $100 million to $130 million.

SAM closed Wednesday's trading at $247.70, up $2.00 or 0.81 percent on a volume of 66,782 shares.