Fortune Brands posted a 38 percent rise in quarterly earnings Friday as profit from its wine and spirits business offset declines in home and hardware products.
But the company warned that full-year earnings would be down from 2006 and would be at the lower end of its forecast range.
"It's still a struggling time for them and they still have a couple of quarters where they really have to work to offset the housing downturn," said Alex Paris, analyst at Barrington Asset Management.
Paris, who rates the stock "buy" and owns shares himself, said he expects improvement in the second half of 2008.
Fortune , the maker of Jim Beam bourbon and Moen faucets, said third-quarter profit rose to $208.9 million, or $1.33 a share, from $151.3 million, or 98 cents a share, a year earlier, when it took a large one-time charge due to an accounting change.
Excluding one-time items, earnings were $1.35 a share.
Analysts, on average, expected $1.29, according to Reuters Estimates.
Net sales fell 1 percent to $2.20 billion, matching the average analyst estimate.
Deerfield, Illinois-based Fortune has benefited from its 2005 acquisition of liquor brands such as Courvoisier cognac and Sauza tequila, deals that placed it among the world's largest spirits companies.
Sales of spirits and wine as well as golf products such as Titleist equipment have helped offset the impact of the severe housing downturn on its home segment, which includes Simonton windows, Omega cabinets and Moen.
In the third quarter, spirits and wine sales rose 1.5 percent, golf sales were up 7 percent, and home and hardware sales were down 4 percent, the company said.
Profit from the spirits and wine business was up 5.1 percent, home and hardware profit fell 6.9 percent, and golf profit fell 1.0 percent.
For 2007, the company now expects earnings before special items to be down in the low- to mid-single digits on a percentage basis. Previously, it forecast earnings would be unchanged to down in the mid-single-digits.
Fortune shares were up 10 cents at $82.92 in morning trade on the New York Stock Exchange. The shares are down 3 percent this year, compared with a rise of 7.7 percent for the Standard & Poor's 500 index.