On Wednesday, Boston Beer will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
As the company behind Sam Adams, Boston Beer has changed the entire brewing industry, shifting the emphasis away from mass-production efficiencies and toward a new emphasis on quality and taste. That has resonated with consumers, who've helped send the company's sales soaring and has rewarded investors nicely. 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.
Stats on Boston Beer
Analyst EPS Estimate
Change From Year-Ago EPS
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo! Finance.
Can Boston Beer keep the growth flowing this quarter?
In recent months, analysts have gotten a little less enthusiastic about Boston Beer's earnings prospects. Although they've kept their estimates unchanged for the just-ended quarter, they've pulled back on full-year 2013 earnings-per-share estimates by $0.06. The stock, though, hasn't slowed down at all, rising 17% since late January.
There's no disputing the huge impact that Boston Beer has had on the brewing industry. Giant brewers Anheuser-Busch and Molson Coors have stepped up with craft-like entrants of their own in an effort to capture the fast-growing craft-beer segment, yet many consumers of craft beers have fierce loyalty to smaller brands and are inclined to resist marketing pushes from bigger companies. Yet Boston Beer faces the challenge of having become the giant in its niche, risking the possibility of having its image change from up-and-coming underdog to domineering establishment-brewer over private microbrewing competitors.
Moreover, not everything has gone right for the company. Net income actually fell year-over-year in 2012, although one-time events in 2011 had a big impact on comparable earnings. Moreover, with huge competition, the company has had to make substantial investments on coming up with new styles, and that in turn has hurt results in its core Boston Lager and other mainstay beers.
Still, Boston Beer has several things going for it. Its strong employee base demonstrates strong loyalty, benefiting from flexible scheduling and working-from-home options as well as getting two free cases of beer per month. On the leadership front, CEO Martin Roper has done a great job of keeping corporate matters on track, freeing up chairman and founder Jim Koch to focus on beer innovation. The company's new can design is just one example of how Boston Beer is meeting larger competitors on their own turf while not compromising its own mission.
In Boston Beer's report, watch for the latest update on the beer-maker's overall strategic plan. Even with the industry changing rapidly, Boston Beer has an opportunity once again to lead the way with its outside-the-box thinking and innovation.
The big question for the company remains whether Boston Beer rise above the rest, or will it be squeezed between small local breweries on one side and global beer giants on the other? For more insight on this key question, we've compiled a premium research report filled with everything you need to know about Boston Beer's risks and opportunities. Just click here now to find out whether Boston Beer is a buy today.
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The article How Boston Beer Expects to Keep Growing originally appeared on Fool.com.
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 Brewing and owns shares of Boston Beer. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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