Fortune Brands slashed its earnings outlook for the second quarter and the whole year, citing a challenging consumer environment as a result of soaring fuel costs and a large tax increase in Australia.
Shares of Fortune Brands dropped more than 5 percent in extended trading Monday. The stock had edged 0.06 percent higher to close at $62.41.
The Deerfield, Ill.-based consumer brands company now projects second-quarter adjusted earnings will be down at a "high-teens-to-mid-20s percentage rate" compared with adjusted earnings of $1.51 a share in the year-ago quarter.
Previously, the company had expected adjusted earnings for the quarter to be down in a high-single-digit-to-mid-teens range For 2008, the company expects adjusted earnings will be down at a "high-single-digit-to-high-teens percentage rate" compared with $5.06 a share in 2007.
Previously, the company had forecast earnings to be flat to down at a high-single-digit percentage rate from a year earlier.
'Weakening consumer sentiment in the U.S., the ongoing correction in the U.S. housing market, and a large and unexpected Australian tax increase on ready-to-drink spirits products have together created a more challenging environment for the companys products,' the company said in a statement.
The company said April was a solid month, but May results were softer-than-expected.
"Weve seen continued softness in June and its now clear that we will not make up the May shortfall," the company said.