Boston Beer earnings disappoint; stock slumps

November 7th, 2007 | Posted by Real Beer

Boston Beer Co.’s share price slumped more than 25% Tuesday following the brewer’s announcement of disappointing third-quarter earnings that included a $3.9 million charge related to a federal tax audit that reduced earnings by 18 cents per share.

Stock of the brewer of Samuel Adams beer closed at $38.55, down $13.15 for the day, after trading as high as $53.42 before its 3 p.m. earnings release. It was down another 4% in early trading Wednesday.

The results included a $3.9 million provision for the possibility the company may owe additional excise taxes. An ongoing audit by the Federal Alcohol and Tobacco Tax and Trade Bureau could push the bill higher.

Third-quarter revenue rose 15.9 percent to $97.2 million, from $83.9 million, as the company sold 476,000 barrels compared with 432,000 barrels a year ago. Profit was hurt by an $8.6 million increase in the costs of goods sold, higher package material and ingredient costs and expenses from the temporary shutdown of its Cincinnati brewery for maintenance.

The company said it has completed due diligence related to its previously announced agreement to buy a brewery outside Allentown, Pa., and expects to begin brewing beer there next summer. It said it also expects to make further unspecified investments in its Sam Adams brewery in Cincinnati over the next three years to ensure a more reliable, efficient operation.

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