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Beam Inc.’s Q1 earnings increased 8 percent

Sheng Xin

Beam Inc. earnings have fluctuated since it separated from Fortune Brands.


Beam Inc. earnings increased 8 percent, beating expectations

by Xin SHENG
May 2, 2013


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Beam Inc. website

Beam Inc. turned in stronger-than-expected first quarter earnings, helped by continued growth in the North American market and by lower advertising expenditures. The stock rose.

The Deerfield, Ill., spirits maker had net income of $114.5 million, 71 cents a diluted share, up from $79.1 million, or 49 cents a share, in the year-ago quarter.

Sales rose 8 percent to $577.7 million from $533.8 million.

Beam said that excluding extraordinary charges and gains, its income from continuing operations was 64 cents a share, 10 cents higher than the 54 cents that analysts surveyed by Yahoo Finance had been expecting.

“We are pleased with Beam’s strong start to 2013, ” said Matt Shattock, president and chief executive officer. “Even as we lapped our most challenging quarterly sales growth comparison of the year, our brands sustained their momentum in the marketplace and continued to outperform.”

The first-quarter results represented a “big beat,” noted Goldman Sachs analyst
Judy E. Hong. “Aside from the brand investment timing, Beam called out benefits from strong mix and pricing as well as accelerated timing of innovations in the quarter.”

“Gross margin came in much better than we anticipated,” John Faucher, an analyst with J.P. Morgan Securities LLC, wrote in a research note, “while ad spending came in much lower than expected.”

“We also see the result as evidence Beam is in good shape for its 2013 earnings objectives and is a contributor to the U.S. industry’s vitality,” said Mark D. Swartzberg, an analyst from Stifel, Nicolaus & Co. “However, we also think more balance across brands would be better for long-term earnings predictability and attractiveness.”

 

In 2010 Beam split from its former parent company Fortune Brands.


In Nasdaq trading Thursday, Beam shares moved higher, closing up $1.82, or 2.83 percent, at $66.11.