CHICAGO, May 6, 2011 /PRNewswire/ -- Zacks.com announces
the list of stocks featured in the Analyst Blog. Every day the
Zacks Equity Research analysts discuss the latest news and events
impacting stocks and the financial markets. Stocks recently
featured in the blog include: Fortune Brands Inc. (NYSE:
FO), Diageo plc (NYSE: DEO), Brown-Forman Corporation
(NYSE: BF.B), Masco Corporation (NYSE: MAS) and Nike
Inc. (NYSE: NKE).
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Here are highlights from Thursday's Analyst Blog:
Fortune Brands Beats Estimates
Fortune Brands Inc.'s (NYSE: FO) adjusted earnings of
59 cents a share for the first
quarter of fiscal 2011 beats the Zacks Consensus Estimate of
51 cents and rose 20.4% from the
prior-year quarter. Earnings, on a GAAP basis, were 52 cents per share compared with 47 cents per share posted in the year-ago
quarter.
Higher volumes, new spirits distribution agreement in
Australia and favorable currency
translations helped the company to report better-than-expected
first-quarter 2011 results. However, gains from these items were
partially offset by higher commodity costs, divestitures and
increased investment in brand creation.
Guidance
The company expects to sustain its growth momentum into fiscal
year 2011. Fortune Brands anticipates earnings to grow in the range
of high-single-digit to high-teens despite higher commodity costs
and investments to support long-term growth.
Besides, management expects the second quarter results to face
challenging comparisons against 2010 results. Moreover, management
believes that natural disaster in Japan and sale of Cobra in 2010 will affect
the second-quarter results by 5
cents.
Business Restructuring
Recently, Fortune Brands announced its intention to split the
company into three standalone units, giving investors pure plays in
golf, home products and alcoholic drinks. After the separation, the
ongoing company will be re-named as Beam Inc. The company's home
products business will retain its name of Fortune Brands Home &
Security.
Moreover, the company revealed that it would spin-off its home
and security business to shareholders in a tax-free transaction.
Fortune Brands' Golf business will also retain its name, Acushnet
Company. The company also plans to either spin-off or sell its golf
business.
Consequent to the spin-off, the company will continue to subsist
as a publicly traded manufacturer of distilled spirit. This unit
has parented brands like Jim Beam bourbon, Courvoisier cognac and
Sauza tequila. Fortune Brands looks forward to pull off this
strategic restructuring within the next several months.
Besides, the company faces intense competition from
well-established players in the market such as Diageo plc
(NYSE: DEO) and Brown-Forman Corporation (NYSE: BF.B) in its
spirits business and Masco Corporation (NYSE: MAS) in its
home and hardware business.
Fortune Brands also encounters competition from Nike Inc.
(NYSE: NKE) in the golf business. Further, global competitive
conditions have also been intensified. Consequently, risk
associated with operating in such a competitive environment may
undermine the company's future operating performance.
Currently, Fortune Brands has a Zacks #4 Rank, implying a
short-term 'Sell' rating on the stock. Besides, the company retains
a long-term 'Neutral' recommendation.
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