Mmm. Delicious. Across the nation, investors in Anheuser-Busch (NYSE:BUD) are reclining on their Barcaloungers, relaxing and awaiting tomorrow's Q4 and full-year 2005 earnings release. Here at the Fool, though, we're feeling a bit impatient -- so let's give the company a quick shake and see what's likely to come out.

Wall Street Wisdom:

  • General consensus. Of the 17 analysts who track A-B's fortunes. 10 of them are fence-sitters, while three venture forth to give "buy" ratings, and four more reply "sell."
  • Revenues. The consensus of the analysts polled is that in Q4 2005, A-B's revenues grew not a whit in comparison with the year-ago quarter.
  • Earnings. Unfortunately, the same cannot be said of profits expectations. Analysts predict that A-B will report earning just $0.27 per share in Q4 2005, versus $0.39 last year.

Margin watch:
After a period of marginal improvement, A-B's sales have remained pretty much static for the past six months. The problem is, the company's cost of goods sold has continued inching up -- it's risen by 6% in each of the past two reported quarters. As a result, A-B's gross margin has been sliding downward, with operating and net margins falling in tandem.

Margins %

6/04

9/04

12/04

3/05

6/05

9/05

Gross

41.9

42.1

34.2

37.5

38.4

38.5

Op.

28.2

28.2

17.0

23.5

24.4

24.8

Net

16.8

16.8

9.9

14.4

15.1

12.7

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects performance for the quarters ending in the named months.

Foolish outlook:
Earlier this month, A-B announced that its U.S. beer sales to wholesalers increased by 0.8% and sales from wholesalers to retailers increased 2.7% in the fourth quarter. Neither of those numbers looks particularly impressive, but they do suggest that the analysts' sales estimates for the quarter could be on the low side. Although the sales figures concern only the U.S. market, A-B makes more than 75% of its sales domestically.

Meanwhile, as they wait to see sales pick up, investors can make good use of their time by monitoring how well the company uses its cash to increase shareholder value. Over the past year, A-B has paid off $265 million in long-term debt and has reduced its share count by nearly 14 million shares. Whatever the sales numbers do, so long as A-B continues paying off debt and buying back its shares at attractive prices, it's serving its investors' long-term interests.

Fool contributorRich Smithowns shares of Anheuser-Busch, a recommendation ofMotley Fool Inside Value. If you're interested in finding the market's best undervalued stocks, take Inside Vale for a free 30-day spin. The Motley Fool has a disclosure policy.