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USA: Fortune Brands sees flat operating profit and warns of tough 2001

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Fortune Brands, the maker of the world's number one Bourbon, Jim Beam, released earnings for the fourth quarter in line with analysts' expectation yesterday. Although the company reported record fourth quarter sales up 3%, income before net charges was flat at $112m.

For the full year diluted EPS before net charges climbed 15% to $2.29. However for the quarter EPS before net charges increased only 6% to $0.71.

CEO Norm Wesley said: "We delivered on the goals we set a year ago for earnings, returns and reduced cost structure. We delivered solid double-digit earnings per share growth of 15%."

However he went on to warn: "Looking ahead, we expect another record year in 2001. Our long-term goal remains double-digit growth in earnings per share, but the current economic environment makes that an ambitious objective for 2001 if you exclude the 9% per-share benefit of lower goodwill amortization."

The contribution of the spirits and wine division increased to a record (on a comparable basis) 14% for the quarter and 11% for the year. But reported full year sales were off 3%.

The company said, however, that comparable sales were up 6%, excluding foreign exchange, excise tax and the impact of sales through the Maxxium international joint venture - which are now net of distribution expense and excise taxes.

The company statement said: "The continued success of Jim Beam Bourbon and DeKuyper cordials combined with strategic focus on developing high-margin super-premium brands, fuelled the segment's performance."

Fortune saw strong growth in Knob Creek small batch Bourbon, Vox ultra-premium vodka and the premium Geyser Peak wines.


Companies: Fortune Brands

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