July 25 (Bloomberg) -- Anheuser-Busch Cos., the world's second-largest brewer, said profit rose more than analysts estimated on higher prices and the biggest increase in U.S. beer shipments in five quarters.

Second-quarter net income climbed 6.1 percent to $677 million, or 88 cents a share, exceeding estimates of 86 cents. Earnings a year earlier were $637.8 million, or 82 cents. Sales advanced 6.1 percent to $4.52 billion, the St. Louis-based brewer said today in a statement.

Anheuser-Busch's U.S. beer shipments rose 2.3 percent on demand for Bud Light leading up to the July 4th holiday. The company sold more Beck's, Bass and other imports made by Belgium's InBev NV. Anheuser raised prices 3.1 percent to cover higher costs, and will increase prices again by early 2008.

``The pricing environment remains favorable so this benefit should continue,'' Christopher Growe, an analyst at A.G. Edwards & Sons, wrote in a note to clients.

Anheuser-Busch also raised its quarterly dividend 12 percent to 33 cents a share from 29.5 cents. It was the 31st straight year of dividend increases.

The shares rose 47 cents, or 1 percent, to $49.59 at 4 p.m. in New York Stock Exchange composite trading. They have gained 4.1 percent in the past 12 months.

Higher Prices

Anheuser raised prices to cover higher costs for aluminum used in its cans and fuel to distribute its products. U.S. market share fell 0.1 point to 48.8 percent as the 147-year-old company faced increased competition from SABMiller Plc and Molson Coors Brewing Co.

Volume rose 1.6 percent outside the U.S., led by demand for Budweiser in China and Canada. Anheuser's equity income, from its stakes in Grupo Modelo SA and Tsingtao Brewery Co., rose 14 percent to $194.7 million, helped in part by a gain on a prior import advertising contract.

Analysts had estimated Anheuser-Busch would earn 86 cents a share, the average of 12 projections compiled by Bloomberg. They had forecast sales of $4.44 billion.

Earnings were helped by a 1 cent gain on the sale of a Spanish theme park investment and a 1 cent gain on the import advertising, Morgan Stanley analyst Bill Pecoriello wrote today in a note to clients. Excluding those items, profit met his estimate of 86 cents a share.

Anheuser-Busch said in May that it would boost profit by offering fewer discounts on Bud Light and Michelob during U.S. holidays this year, including Memorial Day in May, Independence Day on July 4th and Labor Day in September.

Fewer Discounts

Sales from wholesalers to U.S. retailers rose 0.1 percent in the second quarter, lagging behind the 2.3 percent increase in Anheuser's sales to the distributors. That implies wholesalers may have to pare purchases later this year.

Sales to retailers have picked up to the ``2 percent range'' for the first three weeks of July, Chief Financial Officer Randy Baker said today on a conference call.

InBev surpassed Anheuser last year as the world's largest brewer with sales of $16.7 billion, compared with Anheuser's $15.7 billion. Anheuser-Busch's 600 distributors began taking over U.S. import rights for InBev's European beers in February.

In June, Anheuser said it was having trouble providing distributors with enough of InBev's beers. InBev Chief Executive Officer Carlos Brito said in May that inventory problems started when previous distributors cut back on orders, while new ones hadn't yet started.

About 65 percent of InBev's import volume in the U.S. has been transitioned to Anheuser's distributors, Baker said today. The disruptions and supply shortages that happened during the second quarter are ``mostly resolved,'' he said.

Beyond beer, sales from the packaging unit rose 4.2 percent to $774.9 million, and theme parks revenue increased 8.4 percent to $400.6 million.

Of the 18 analysts who track Anheuser-Busch, five rate the stock a ``buy,'' 11 say ``hold'' and two recommend selling.

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.

Last Updated: July 25, 2007 17:33 EDT