Brown-Forman Profit Rises; Boosts 2009 Outlook

Alcoholic drinks maker Brown-Forman reported better-than-expected profit, helped by higher sales of Jack Daniel's Tennessee whiskey and Finlandia vodka, and raised its full-year forecast.

Spirits sales have held up in the current recession, though several companies have said consumers are going out less and drinking at home more.

AP Tequila Shot

In the first half of the fiscal year, worldwide shipments of Jack Daniel's rose in the mid-single digits in percentage terms, as declines in Germany, Britain and Spain partially offset gains in the United States, Eastern Europe, Australia and Latin America.

Finlandia's worldwide shipments rose at a high-single-digit rate, driven by strength in Eastern Europe.

Net income at Brown-Forman, which also makes Herradura tequila and Southern Comfort liqueur, rose to $143.2 million, or 94 cents per share, in the fiscal second quarter ended Oct. 31, from $129.4 million, or 83 cents per share, a year ago. Analysts, on average, expected 93 cents per share, according to Reuters Estimates.

• Get Real-Time Quotes for Brown-Forman

Net sales rose about 5 percent to $934.7 million.

Net sales for Southern Comfort fell at a low-single-digit rate, though shipment trends improved slightly in the second quarter, the company said.

The company raised its full-year earnings outlook, citing a gain of 12 cents per share on the expected sale of its Bolla and Fontana Candida wine brands to Italy's Gruppo Italiano Vini.

Brown-Forman, based in Louisville, Kentucky, announced earlier this week it intends to sell the Italian wine brands.

Terms were not disclosed.

Brown-Forman said it now expects fiscal 2009 earnings of $3.00 to $3.20 per share, representing growth of 6 percent to 13 percent from year-ago earnings of $2.84 per share.

In August, the company said it expected earnings to rise 1 percent to 7 percent. Based on that forecast, analysts on average, looked for earnings of $2.95 per share, according to Reuters Estimates.

Brown-Forman stock rose over $2, or 5 percent, to $46 in early Friday trade on the New York Stock Exchange. The shares have fallen nearly 22 percent in the last three months through Thursday. The Dow Jones U.S. Beverages Index fell 17 percent over the same period.

Copyright 2008 Reuters. Click for restrictions.