Boston Beer Company Co. (SAM) fourth-quarter results from early March fell a pinch short of analyst expectations, but shares have since recovered and continue to trade near the 52-week high.
Company Description
Boston Beer Co. produces and sells low alcohol beverages, including the popular Sam Adams beer, worldwide. The company was founded in 1984 and has a market cap of $741 million.
Fourth-Quarter Results
Revenue for the period was up 3% to $107 million. Earnings came in a bit short of expectations at 52 cents, 6 cents short of the consensus, but more than double last year’s 25 cents.
Boston Beer noted that its results were helped by a 500 basis point increase in gross margin, jumping to 52%, driven by price increases, improved operating costs and lower energy expenses. The company also boosted its cash position, up $46 million from last year to $55 million.
Boston Beer has been returning value to its shareholder by buying back its shares, repurchasing 209,000 shares for $7 million in 2009. In the first quarter of 2010, the company repurchased an additional 287,000 shares for $13.5 million.
Estimates
In spite of the company’s narrow Q4 miss, analysts have recently raised estimates, with the current year up 18 cents in the last two months to $2.57. The next-year estimate is pegged at $2.85, a solid 11% growth projection.
Based on the current-year estimates, shares are trading with a forward P/E multiple of 20X, a slight premium to the overall market.
The Chart
Shares of SAM have been trading near the 52-week high at $53.82 for the last few weeks after rebounding from a key trend line in early February. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research
