Anheuser-Busch cuts dividend in half, shares crater to 6-year low

  • Anheuser-Busch cuts its dividend in half as it looks to steady its balance sheet after its acquisition of rival SABMiller in 2016 swelled its debt to $109 billion.
  • The company says dividends will increase over time but in the short-term growth will be more modest.
  • Its beer sales decline in the third quarter.
An employee adjusts bottles of Bud Light brand beer at an Anheuser-Busch InBev NV facility in Williamsburg, Virginia, U.S., on Wednesday, Aug. 8, 2018. 
Andrew Harrer | Bloomberg | Getty Images
An employee adjusts bottles of Bud Light brand beer at an Anheuser-Busch InBev NV facility in Williamsburg, Virginia, U.S., on Wednesday, Aug. 8, 2018. 

Shares of Anheuser-Busch plummeted more than 10 percent in premarket trading Thursday after the brewer cut its dividend in half and said beer sales fell during the third quarter.

The dividend cut comes as the company is looking to steady its balance sheet after its 2016 acquisition of rival SABMiller swelled its debt to $109 billion. Its stock hit a new six-year low at around $74 a share.

"In the last six months, we've seen a lot of [currency] volatility," Chief Financial Officer Felipe Dutra told reporters on a conference call Thursday, according to Reuters. "This scenario triggers some sort of uncertainty and at a certain point ... we thought it was the right time to adjust the dividend."

The company said its dividends will increase over time but its short-term growth will be more modest.

Beer sales also declined, falling 1.5 percent to retailers and 0.5 percent to wholesalers during the three months. In comparison, Anheuser-Busch said that industry-wide sales to retailers declined 0.5 percent.

The company also said market share declined in the quarter as customers traded up to pricier brews from rivals.

Shares of the company are down more than 26 percent since January.

WATCH:How Campbell Soup fell off its perch