NEW YORK – Liquor company Brown-Forman Corp. posted a 8 percent drop in first-quarter net income, although strong international sales in countries such as Australia and Germany helped offset sluggish U.S. sales.
The maker of Jack Daniel's Tennessee Whiskey and Finlandia vodka says it earned $111.4 million, or 76 cents per share, in the three months ending July 31. That's down from $121.4 million, or 81 cents per share last year.
Revenue rose 1 percent to $744.9 million.
Analysts expected the company to earn 83 cents per share on revenue of $758.4 million, according to Thomson Reuters.
Louisville, Ky.-based Brown-Forman has been hurting as people limit their trips out to bars in the down economy.
Brands that grew include el Jimador, New Mix, Sonoma-Cutrer, Woodford Reserve, Tequila Herradura, and Finlandia.
Southern Comfort, however, declined.
International sales also grew in Mexico, Britain and Turkey. The company sold 9 percent more Jack Daniel's Tennessee Whiskey overseas in the quarter, while in the U.S. the figure dropped 4 percent. The company said that was due to a tough comparison to last year when retailesr bought more because of expected increases in excise taxes.
The company rolled out new packages for the Southern Comfort line, Chambord, and Tuaca and began shipping Chambord Vodka and Southern Comfort Lime.
"These and other innovations are expected to increase brand awareness and to contribute to incremental sales, although their near-term impact is projected to be relatively minor," the company said.
The company reaffirmed its guidance for the fiscal year, saying it continues to expect 2011 earnings per share from $2.98 to $3.38. Analysts expect earnings per share of $3.06 on revenue of $10.64 billion, according to Thomson.
Brown-Forman sold 3 percent more of Jack Daniel's whiskey brands in the quarter and 19 percent more of its ready-to-drink Jack Daniel's line. People have been drinking more at home because of the down economy, so Brown-Forman and other alcohol makers have been ramping up their ready-to-drink lines to demystify cocktails and keep people driking.
The company's ready-to-drink line for Southern Comfort posted a 16 percent rise in volume, while the traditional Southern Comfort brand's volume fell 6 percent. Brown-Forman said the Southern Comfort line is being hurt by heightened compeition from flavored whiskeys, vodkas and spiced rums.
Canadian Mist volume fell 8 percent, Korbel Champagne was unchanged and Finlandia vodka rose 3 percent.
Shares fell 30 cents to $60.99 in premarket trading Wednesday.
NEW YORK (Reuters) – Burger King Holdings Inc, the No. 2 U.S. hamburger chain, has been considering a possible sale and has held talks with potential buyers, a source familiar with the situation said on Wednesday.
The company, which has a market capitalization of about $2.3 billion, has been public since May 2006.
Famed for its flame-broiled Whopper, Burger King had previously been owned by private equity, which still hold a stake in the company. TPG, Bain Capital and Goldman Sachs (GS.N) had owned it; after buying Burger King from British drinks company Diageo (DGE.L) in 2002 for about $1.5 billion.
The Wall Street Journal previously reported the news, saying that Burger King has been in talks with private equity firms in recent weeks about a possible sale, and one interested firm was 3i Group Plc (III.L).
The source who spoke to Reuters confirmed that one potentially interested party was 3i.
Burger King and 3i could not immediately be reached for comment.
Burger King in August forecast weak demand for its new fiscal year amid a struggling economy and said it was unsure how costs for key ingredients like beef would impact the company.
The company did not issue an earnings forecast for fiscal 2011 but said on Tuesday that high U.S. unemployment and government austerity programs in several European countries would weigh on same-restaurant sales.
The company, which competes with McDonald's Corp (MCD.N), said it expected commodity costs in the United States to be flat in fiscal 2011, although prices of wheat and beef were uncertain.
Private equity firms have become increasingly active in the past few months, amid a spurt of M&A activity.
In August, Blackstone Group struck a deal to buy power company Dynegy Inc (DYN.N) for $543 million, or $4.7 billion including debt.
Last month was the busiest August since 1999 in terms of the value of M&A deals struck.
(Additional reporting by Krishna N. Das in Bangalore; Editing by Mike Nesbit)
NEW DELHI (Reuters) – India will send notices to Google and Skype asking them to set up servers in the country and give access to its internet data, a top home ministry official said on Wednesday.
Echoing concerns raised by several other countries, India has already said it wants the means to fully track and read BlackBerry's secure email and access to internet data that officials fear could be misused by militants.
BlackBerry maker, Research In Motion, will give India access to secure BlackBerry data beginning September 1, a government source said this week, leading New Delhi to put off a decision on whether to shut down the smartphone.
Home Secretary G.K. Pillai told reporters that similar demands will be made of Google and Skype and notices will be sent to them. He did not say when.
BlackBerry's reputation is built on its system security and a compromise under pressure from governments could damage the device's popularity with business professionals and politicians.
Apple Inc and Nokia, RIM's two biggest smartphone rivals, may have the most to gain if India blocks BlackBerry services. Nokia said on Monday it will host an email server in India from November 5.
(Reporting by C.J. Kuncheria; editing by Alistair Scrutton)