Brown-Forman 2Q profit edges up

Liquor producer Brown-Forman Corp. said Thursday that its profit rose 4.5 percent in the second quarter as robust international sales more than offset sluggish U.S. demand for its leading Jack Daniel's Tennessee Whiskey and Southern Comfort brands.

The distiller also narrowed its profit forecast for the full fiscal year.

For the three months ended Oct. 31, Brown-Forman earned $129.4 million, or $1.04 per share, up from $123.8 million, or $1 a share, in the year-ago period.

Analysts surveyed by Thomson Financial expected profit of $1 per share in the latest quarter. Those estimates typically exclude one-time items.

Revenue rose 23 percent to $893.4 million from $727.1 million a year ago.

Brown-Forman cited strong international demand, particularly in Europe, along with a weaker U.S. dollar and its acquisition of Casa Herradura premium tequilas as key factors behind the higher quarterly sales.

Quarterly global sales for the company's dominant brand, Jack Daniel's, grew in the low-single digits as gains internationally more than offset a modest decline in U.S. sales.

Southern Comfort worldwide sales grew at a low-single digit rate in the quarter, as strong increases in the United Kingdom and South Africa offset a slight decline in U.S. sales.

Global sales for the company's Finlandia vodka grew at a double-digit rate in the quarter, led by a continued strong performance in Eastern Europe.

Sales for the company's super-premium developing brands increased in the high-single digits, led by Woodford Reserve bourbon, Sonoma-Cutrer wines and Chambord, a French liqueur.

The company said that advertising expenses rose $20 million, or 22 percent, in the quarter, reflecting additional investments behind its Jack Daniel's, Southern Comfort and Finlandia brands, as well as new investments to promote its recently acquired brands.

The Louisville-based company earned $224.6 million, or $1.81 a shasre, for the first six months of the year, up from $217.6 million, or $1.75 a share, in the year-ago period. Six-month revenue rose to $1.63 billion from $1.36 billion a year ago.

Brown-Forman also narrowed the range of its full-year earnings outlook to $3.42 to $3.54 per share, representing growth of 9 percent to 13 percent over the prior year. The prior forecast had been in the range of $3.35 to $3.55 per share.

The latest projection includes an expected charge of 13 cents to 18 cents per share associated with the acquisition of Casa Herradura, which closed in January 2007. The expected charge is unchanged from previous forecasts.