Brazilian brewer AmBev (NYSE:ABV), also known as Companhia de Bebidas das Americas, reported its second-quarter results yesterday, and some investors were left with a bitter beer face.

Here are some of the key statistics from the report:

  • Earnings per share of $0.37 (U.S. dollars per ADR) fell short of the average analyst estimate of $0.40 per ADR.
  • Revenue came in 12% higher, at 4.52 billion Brazilian reais, or approximately 2.15 billion U.S. dollars. Cost of Goods Sold (COGS), however, grew by nearly 16%, thanks mainly to higher commodity prices.
  • Sales volumes were up 4.6% on average across all segments. AmBev management was quick to note that volume comparisons to second-quarter 2006 are difficult, since last year was a World Cup year.

Shares traded down 4% as a result.

Still a good brew
Though many foreign stocks have taken a hit during the recent market volatility, AmBev has particularly suffered, dropping 17% off its July highs. Another major Latin American brewer, FEMSA (NYSE:FMX), has also been hurting of late, having shed 13% since July 2, amidst its own lackluster quarter.

Given their footholds in high-growth Latin American economies, investors naturally expect higher growth from AmBev and FEMSA, which is why they also come with higher price tags than many of their peers. Because of this, investors should expect some volatility come earnings time.

Despite the increase in gross margins, AmBev's operating margins actually improved and cash from operations was higher, as management continues to focus on cash generation. The recent dip in the stock price may also give AmBev's management an enticing opportunity to put some of its authorized 1-billion-real share buyback program to use.

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Fool contributor Todd Wenning hears Brazil is lovely this time of year. He does not own shares of any company mentioned. The Fool's disclosure policy reminds you that what happens at Carnival stays at Carnival.