Ambev (NYSE:ABEV) Announces Quarterly Earnings Results, Meets Expectations

Ambev (NYSE:ABEV) posted its earnings results on Thursday. The company reported $0.05 EPS for the quarter, meeting analysts’ consensus estimates of $0.05, FiscalAI reports. The company had revenue of $4.17 billion for the quarter, compared to analysts’ expectations of $4.21 billion. Ambev had a net margin of 17.80% and a return on equity of 18.36%.

Here are the key takeaways from Ambev’s conference call:

• Consistent growth continued: Third-quarter volume rose 0.8%, net revenue increased 7.6%, normalized EBITDA grew 8.9% with 40 basis points of margin expansion, and normalized EPS climbed 15.4%. Year-to-date normalized EBITDA and EPS increased 9.3% and 12.3%, respectively.
• Brazil Beer showed improving momentum and market-share gains. Volumes grew 3% year to date, while the company reported broad-based share gains, particularly in premium and zero-alcohol products, and said inventory levels were appropriate heading into the high season.
• Digital platforms are becoming meaningful growth engines. BEES Marketplace GMV grew more than 80%, while Zé Delivery GMV increased in the mid-teens; management highlighted direct consumer data as a tool for testing innovations and expanding premium and balanced-choice offerings.
• Cash generation and shareholder returns strengthened. Operating cash flow rose 39% to BRL 15.6 billion in the first nine months, the company completed a BRL 3.3 billion share buyback, paid BRL 1.9 billion in interest on capital, and approved a new buyback of up to 190 million shares, or approximately BRL 3 billion.
• Cost and macroeconomic risks remain. Consolidated cash COGS per hectoliter rose 6.5% in the quarter, with commodity and logistics pressures still affecting Brazil Beer; Argentina faced weak consumption and adverse weather, while a potential Brazilian alcohol “Sin Tax” remains an uncertainty despite management’s expectation of tax neutrality.

Ambev Trading Down 0.4%

NYSE ABEV traded down $0.01 during trading on Friday, hitting $2.66. The stock had a trading volume of 33,342,778 shares, compared to its average volume of 27,835,100. The company has a quick ratio of 0.76, a current ratio of 1.02 and a debt-to-equity ratio of 0.02. The company has a market capitalization of $41.93 billion, a PE ratio of 14.00, a PEG ratio of 1.71 and a beta of 0.58. The firm has a 50 day moving average price of $3.02 and a 200 day moving average price of $3.02. Ambev has a twelve month low of $2.28 and a twelve month high of $3.45.

Ambev Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Monday, January 11th. Shareholders of record on Wednesday, September 23rd will be given a $0.0092 dividend. This represents a $0.04 annualized dividend and a yield of 1.4%. The ex-dividend date of this dividend is Wednesday, September 23rd. Ambev’s payout ratio is currently 15.00%.

Insider Activity

In other news, insider Carla Smith De Vasconcellos Crippa Prado sold 60,757 shares of the stock in a transaction dated Thursday, September 3rd. The shares were sold at an average price of $3.09, for a total transaction of $187,739.13. Following the sale, the insider owned 80,707 shares of the company’s stock, valued at approximately $249,384.63. This represents a 42.95% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website.

Analyst Upgrades and Downgrades

A number of equities research analysts have weighed in on ABEV shares. Wall Street Zen cut shares of Ambev from a “buy” rating to a “hold” rating in a research report on Saturday. Scotiabank lowered shares of Ambev from a “sector outperform” rating to a “sector perform” rating in a report on Wednesday, July 15th. Weiss Ratings cut shares of Ambev from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Monday. Bank of America cut shares of Ambev from a “neutral” rating to an “underperform” rating and set a $3.30 price objective for the company. in a research report on Wednesday, October 7th. Finally, Barclays dropped their target price on shares of Ambev from $3.50 to $3.00 and set an “equal weight” rating for the company in a report on Friday. Four investment analysts have rated the stock with a Hold rating and two have issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company has an average rating of “Reduce” and an average price target of $3.01.

Trending Headlines about Ambev

Here are the key news stories impacting Ambev this week:

• Positive Sentiment: Ambev’s board approved a new two-year program to repurchase up to 190 million shares. The company also completed a prior program and canceled 279 million repurchased shares, which could support per-share value by reducing the share count. Ambev share buyback program
• Positive Sentiment: Quarterly earnings per share were $0.05, matching analyst expectations, while Ambev reported a 17.48% return on equity and an 18.47% net margin. Ambev fiscal third-quarter earnings
• Neutral Sentiment: Ambev filed its October Form 6-K with the U.S. Securities and Exchange Commission and discussed third-quarter results with analysts. The earnings-call materials provide additional detail on performance and the outlook, but the headline results were broadly in line with expectations. Ambev Form 6-K filing
• Negative Sentiment: Revenue of $4.17 billion fell short of the $4.21 billion consensus estimate, and reports characterized third-quarter profit as down 10%. The revenue miss and weaker profit trend likely outweighed the in-line EPS result. Ambev third-quarter profit report
• Negative Sentiment: Barclays lowered its price target for ABEV from $3.50 to $3.00 and maintained an “equal weight” rating. Although the new target still implies potential upside, the reduction signals more cautious expectations for the brewer’s growth and valuation. Barclays Ambev price target

About Ambev

Ambev SA is a Brazilian beverage company headquartered in São Paulo and one of the largest beverage producers in Latin America. Its principal business is the production, distribution and sale of beer, although it also offers soft drinks, carbonated beverages, bottled water, energy drinks and other non-alcoholic products.

The company’s beer portfolio includes brands such as Brahma, Skol, Antarctica, Bohemia, Original, Budweiser, Stella Artois and Corona, with brand availability varying by market.