Fortune Brands earnings rise on liquor sales
Deerfield-based Fortune Brands, the holding company for Jim Beam bourbon, said third-quarter profit rose more than analysts anticipated on higher wine and liquor sales.
However, the owner of Moen faucets lowered its full-year profit forecast on slowing sales of housing-related products.
Revenue in the home and hardware unit, Fortune's largest, fell 4 percent, while sales in the liquor unit gained 1.5 percent.
Chief Executive Officer Norm Wesley, 57, added Sauza tequila and Maker's Mark bourbon to the spirits unit to ease dependence on the slumping U.S. housing market.
"The slightly perverse good news is that the struggles in the housing market apparently lead to higher alcohol consumption," said Patricia Edwards, a Seattle-based money manager at Wentworth, Hauser & Violich. "It's another example of the beauty of a diversified business."
Net income climbed 38 percent to $208.9 million, or $1.33 a share, from $151.3 million, or 98 cents, a year earlier, beating estimates by 6 cents, Fortune said Friday in a statement. Sales fell less than 1 percent to $2.2 billion, Fortune said.
Once known as American Brands Inc., the company has owned products as diverse as Lucky Strike cigarettes and Swingline staplers. Fortune's brands include Titleist golf balls and Geyser Peak wine.
Fortune narrowed its full-year earnings-per-share forecast to a decrease on a percentage basis in the "low-to-mid-single digits" range. In July, it forecast profit ranging from unchanged to a "mid-single digit" decrease.
Fortune Brands rose 90 cents, or 1.1 percent, to $83.72 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have dropped 2 percent this year, compared with a 23 percent decline by Masco Corp., the maker of Behr paint and Delta faucets.
Excluding charges related to its home unit, Fortune earned $1.35 a share. Eight analysts surveyed by Bloomberg estimated average third-quarter profit of $1.29. Seven projected revenue of $2.15 billion.
Fortune, with its Moen faucets and Therma-Tru doors, is withstanding the real-estate slump better than Masco with products that are more used toward remodeling rather than new construction.