Brown-Forman Uncorks Strong Earnings Helped by Tequila Sales
Brown-Forman, the maker of Jack Daniel's Tennessee Whiskey, posted better-than-expected quarterly earnings and forecast fiscal 2008 profit above estimates.
Shares of the wine and spirit company rose more than 7% before settling back somewhat .
Profit were 56 cents a share, in the fourth quarter ended April 30, topping analysts' average expectation of 50 cents a share, as compiled by Thomson Financial.
The wine and spirit company earned $78.4 million, or 63 cents a share, in the year-earlier fourth quarter.
Quarterly sales rose to $690.8 million from $585.1 million, boosted by the recent acquisition of Mexican tequila maker Casa Herradura.
Louisville, Kentucky-based Brown-Forman said it expects to earn $3.53 a share to $3.68 a share in fiscal 2008, excluding costs associated with the Casa Herradura acquisition. Analysts' average forecast has been $3.41 a share. On the same basis, Brown-Forman earned $3.22 a share for all of fiscal 2007.
"Global trends for our premium beverage portfolio remain strong" for the upcoming year, Chief Financial Officer Phoebe Wood said in a conference call.
The company has been benefiting from a trend that has seen U.S. consumers move away from beer toward liquor and wine, and "trade up" to more expensive premium brands.
However, in the third quarter it said sales growth of Jack Daniel's slowed in the United States amid an industrywide moderation in demand for distilled spirits.