Boston Beer has pioneered the beer industry, opening the gates for craft-beer makers around the world to go up against mass-produced brewing giants. Now that Boston Beer is itself a giant, though, can it keep offering what customers expect from the craft brewer? Let’s take an early look at what’s been happening with Boston Beer over the past quarter and what we’re likely to see in its quarterly report on Wednesday.
Stats on Boston Beer
| Analyst EPS Estimate | $1.25 |
| Change From Year-Ago EPS | 4.2% |
| Revenue Estimate | $152 million |
| Change From Year-Ago Revenue | 7.3% |
| Earnings Beats in Past 4 Quarters | 3 |
Source: Yahoo! Finance.
Will Boston Beer produce intoxicating results this quarter?
Analysts have gotten increasingly optimistic about Boston Beer’s earnings prospects over the past few months, as they’ve boosted their consensus earnings-per-share estimates by $0.12 for the quarter and by nearly $0.40 for full-year 2013. That optimism has also shown up in the share price, which has risen more than 30% just since mid-November.
Back in December, we already got a hint as to how Boston Beer thought the just-finished quarter was going. In a press release, the company said gave positive guidance for earnings as well as throughput volume from warehouses to consumer outlets and from there to their customers, also known as depletions. Boston Beer boosted its earnings guidance for full-year 2012 from a range of $3.80 to $4.20 to a higher range of $4.30 to $4.60.
The success of Sam Adams has provoked responses from big brewers trying to emphasize their ability to make what they call craft beer. Yet offerings from Anheuser-Busch InBev NV (NYSE:BUD) and Molson Coors Brewing Company (NYSE:TAP) have drawn criticism from the Brewers Association, which argues that acquiring craft-brewing companies shouldn’t really count as making craft beer. Given that the craft beer segment is growing at a rapid pace, it’s not hard to understand why big brewers want a taste of the industry’s success.
In Boston Beer’s report, look for hints as to how the company will respond to potential consolidation in the industry. Although Anheuser’s proposed buyout of Grupo Modelo raised antitrust concerns, a new proposal to sell a Mexican brewery as well as U.S. rights to Corona and other Grupo Modelo brands to Constellation Brands, Inc. (NYSE:STZ) may be enough to get the deal through. With a reputation for quality, Boston Beer has to walk a fine line between being big enough to be relevant while not losing its cachet as a true craft brewer.
The article Boston Beer Earnings: An Early Look originally appeared on Fool.com and is written by Dan Caplinger.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends Boston Beer and Molson Coors and owns shares of Boston Beer.
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