Anheuser-Busch InBev, the world's largest beer maker, sold less beer but made more money than expected in the second quarter as drinkers absorbed price hikes and traded up to premium lagers. The maker of Budweiser, Beck's and Stella Artois reassured investors with a surge in earnings that showed it was turning the corner in the United States and Brazil, its two main markets. "It isn't by any means a blow-out quarter but it has exceeded the market's expectations and placated investor concerns over a weaker Brazil and the lack of margin growth in North America," said Jefferies analyst Dirk Van Vlaanderen. The world's top brewers are relying on emerging markets for growth amid a prolonged squeeze on consumer incomes in austerity-hit Europe and limited U.S. expansion. But bad weather and tax-led price hikes have posed challenges recently. SABMiller, the world's number two brewer, last week reported a surprise drop in lager volumes in the April-June period due to a cold and damp spring in Europe and a cooler build-up to summer in the United States. Anheuser-Busch InBev said consumers drank less in its two biggest markets, the United States and Brazil, with the only marked increase in China. Volumes as a whole dropped 1.2 percent on a like-for-like basis. But revenue increased by 3.9 percent and the company reversed a year-long decline in its profit margin in the U.S. and Brazil. Second-quarter earnings before interest, tax, depreciation and amortisation rose 5.8 percent on a like-for-like basis to $3.90 billion. That beat the $3.78 billion forecast in a Reuters poll of 11 brokers and banks. In the United States, where the company has almost half the beer market, revenue grew due to a late-2012 price increase and the success of new products, including 6 percent lager Bud Light Platinum and margarita-flavoured Bud Light Lime Lima-a-Rita. North American profit margins expanded after four quarters of declines because it is now producing those beers in more breweries across the country, reducing the distribution costs. In Brazil, where it has two thirds of the market, AB InBev suffered a second consecutive quarter of declining volumes. But it was a modest 0.4 percent drop after an 8.2 percent slump in the first three months of the year. The company said it benefited from better weather and the Confederations Cup soccer tournament, which added an estimated 30 million litres. Chief Financial Officer Felipe Dutra said the event had served as a useful test run for next year's World Cup in Brazil, when the boost to volumes could be about four times as big. The company stuck to its guidance for sales in Brazil this year to be flat or down by a low single-digit percentage. A number of consumer companies have suffered weakness in Brazil, which has been hit by sharp food price inflation and social unrest. Spirits maker Diageo said on Wednesday its operations in Brazil had suffered weakness in the year to the end of June and would stay soft in the next quarter. However, Dutra said the trend there was improving. "We think the second quarter is a confirmation of that and we do expect the second half of the year to be better on average than the first half," Dutra said. (Reuters)