Fortune Brands, the parent of Jim Beam Brands said today that fourth-quarter profit rose 2%, as divestitures hurt spirits sales.

The company earned US$131.4m, or 86 cents a share in the quarter, compared with $128.8 million, or 84 cents in the year ago quarter. For the full year, the group saw earnings of US$525.6m, or $3.41 per diluted share, up 37% from $2.49 a year ago. The company said it had benefited from strong operating performance, lower goodwill amortization and higher net gains from special items.

Reported sales reached $1.43 billion, off 0.6% in the fourth quarter, while operating income was US$223.5m, up from US$74m a year ago. For the full year, reported sales were US$5.68 billion, up 2%. Operating income was US$786.6m, up 48%.

Fortune's sales for the quarter were down due to the divestiture of its private-label Scotch whiskey business and the fact that the company recorded sales for Absolut vodka in the 2001 fourth quarter before that brand was moved into a joint venture

"2002 was an excellent year for Fortune Brands," said chairman and chief executive officer Norm Wesley. "We continued to win in the marketplace by building our powerful consumer brands. We generated huge cash flow that we can use to make acquisitions, repurchase shares and pay dividends. We leveraged higher volumes, improved productivity and managed inventory better, all of which significantly improved our asset returns. Above all, we created substantial value for our shareholders.

"Like nearly all companies in 2003, we'll face economic uncertainty and the headwinds of higher costs for pension expense, employee health care plans and insurance. But with solid business momentum, we feel well positioned to achieve our long-term goals of double-digit EPS growth and improved returns in 2003," Wesley said. "For the first quarter, we expect solid double-digit EPS growth."