Brown-Forman's Q2 Profit Jump Of 11% Shows Rising Demand In Liquor Amid Recession

Louisville, KY (AHN) - Brown-Forman Corporation (NYSE:BFB)(NYSE:BFA) reported better than expected second quarter earnings on higher sales of its Jack Daniel's Tennessee Whiskey brand in the U.S. and Finlandia vodka brand in Eastern Europe amid slowdown in the U.S. economy.

The company also raised its fiscal 2009 full year earnings per share outlook to a range of $3.00 to $3.20, representing growth of 6 percent to 13 percent over prior-year earnings per share of $2.84.

The increase in the outlook is due to an estimated $0.12 per share net gain on the expected sale of Bolla and Fontana Candida brands in the current quarter.

The firm said that the outlook is based on the expectation that the quarterly report will continue to present year-to-date trends for Jack Daniel's, Southern Comfort, and Finlandia.

"A weaker than anticipated consumer and trade environment, due to the current global economic conditions, could have a significant impact on the company's ability to maintain these trends," Brown-Forman said in a statement on late Friday.

The Louisville, Kentucky-based company's net earnings for the second-quarter jumped by 11 percent to $143.2 million, or 94 cents a share, from $129.5 million, or 83 cents, a year earlier in the same period.

The market analysts on Wall Street had expected the firm to post earnings in the quarter of 92 cents on weakening consumer spending in the worst credit crisis in seven decades.

Brown-Forman reported that its sales, including excise taxes, increased by 4.6 percent to $934.7 million in the three months ended Oct. 31. The market analysts had projected the company to post revenue of $924 million in the quarter.

"We are pleased with our results, particularly in the second quarter where we saw improvement during a challenging economic environment," Paul Varga, chief executive officer, said in the statement.

On Thursday, Brown-Forman announced that its Board of Directors has authorized the repurchase of up to $250 million of its outstanding Class A and Class B common shares over the next 12 months.

On Friday, the Class B shares of the firm closed higher by as much as $4.22, or 9.62 percent, to $48.10 at 4:02 p.m., after hitting the day's high at $48.34 in composite trading on the New York Stock Exchange.

The stock, which has dropped 26 percent so far this year through Thursday, has traded as low as $40.46 and as high as $63.02 in the last 52-week period in New York.