Deerfield’s Beam 2Q net income slips, but sales improve

Deerfield-based Spirits maker Beam Inc. said Thursday that its net income fell in the second quarter on costs related to debt, but sales of new Jim Beam bourbons, tequilas, and Pinnacle vodka helped boost revenue.

Beam took a $43.1 million charge related to the early retirement of some of its debt. The company said sales of Jim Beam brand drinks improved thanks to newer products like Jim Beam Honey and Devil’s Cut, its Sauza and Hornitos tequilas sold well, and Pinnacle vodka sales continued to improve. Beam said U.S. sales of ready-to-serve cocktails were not as strong.

The company’s shares picked up $1.97, or 3.1 percent, to $66.40 in morning trading.

Beam said its net income dropped to $74.3 million, or 46 cents per share, for the three months ending June 30 from $101.1 million, or 62 cents per share, a year ago.

The company said it earned 64 cents per share excluding one-time items, up from 59 cents per share in the year-ago period. Analysts expected earnings of 60 cents per share, according to FactSet.

Revenue after excise taxes rose 7 percent to $637.6 million from $597 million. Analysts expected $624 million.

The company said it revised several years of financial statements because it discovered errors in the way it recognized revenue from sales of Canadian whisky and other non-branded bulk spirits. The errors date to 2006. Beam said it made other changes as well. In total it said the corrections reduced its operating income by about $10 million from 2006 to 2010, $9.9 million in 2011, $2.4 million in 2012, and $1.8 million in the first quarter of 2013.

Beam also approved repurchase of up to 3 million shares. It had about 163 million shares on the market during the second quarter, and its stock has traded between $52.69 and $69.78 in the last year.