CHICAGO, May 5, 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 Wednesday's Analyst Blog:
Earnings Preview: Fortune Brands
Fortune Brands Inc. (NYSE: FO) is scheduled to release
its first-quarter 2011 results on Thursday,
May 5, 2011. The Zacks Consensus Estimate is 51 cents a share for the first quarter of fiscal
2011. This represents a year-over-year estimated growth of
4.1%.
Fourth Quarter Performance
Fortune Brands' adjusted earnings for the fourth quarter of
fiscal 2010 came in at 63 cents a
share, beating the Zacks Consensus Estimate of 58 cents but falling short of the year-ago
adjusted figure of 66 cents.
Earnings, on a GAAP basis, were 55
cents a share compared with 8
cents a share posted in the year-ago quarter. Meanwhile, net
sales during the reported quarter grew 5.5% year over year to
$1,895.5 million. Total revenue beat
the Zacks Consensus Estimate of $1,799
million.
Earnings Guidance
The company expects to sustain its growth momentum into fiscal
year 2011. Fortune Brands anticipates 2011 earnings to grow in a
range of high-single-digit to high-teens.
Agreement of Analysts
Over the last 30 days, only 1 analyst out of 11 moved the
estimate downward while none of the analysts positively revised
their estimates, for the first quarter of fiscal 2011. For fiscal
2011, only 1 out of 13 analysts revised the estimate downward over
the last 30 days.
Magnitude of Estimate Revisions
The magnitude of estimate revisions for Fortune Brandsdepicts a
negative outlook for the upcoming quarter with the consensus
estimate dipping 1 cent over the last
30 days to 51 cents. For fiscal 2011,
a lack of estimate revision has resulted in the consensus hitting a
plateau, at $3.24, over the past one
month.
Earnings Surprise
Considering earnings surprises, the stock has not been steady
over the last four quarters, with a mix of positive and negative
surprises ranging between a low of -2.7% and a high of 58.1%. The
average remained at 22.8%.
Our Recommendation
We have maintained our long-term 'Neutral' recommendation on
Fortune Brands Inc. However, the company has a Zacks #4 Rank,
implying a short-term 'Sell' rating on the stock.
Fortune Brands is a leading diversified consumer products
company that caters to a wide array of products ranging from home
and hardware to premium spirits and golf equipment. The
Illinois-based company
manufactures and sources its products largely from Canada, Mexico, Europe, China, Thailand and the U.S. Fortune Brands offers
its products mainly in the U.S., Canada, Europe (primarily the U.K, Spain, Germany, and France), Australia, and Mexico. The company possesses a portfolio of
well-established brands, such as Moen, Master Lock, Therma-Tru and
Simonton in home and security products; Jim Beam, Sauza and Maker's
Mark in spirits; and Titleist and FootJoy in golf products. The
diversified portfolio offers a unique competitive edge to the
company.
Moreover, in March 2011, Beam
Global Spirits & Wine, a unit of Fortune Brands, added one more
drink to its portfolio of spirits by acquiring the brand Skinnygirl
on undisclosed terms. Skinnygirl is already a well-known brand in
the U.S., popular among women seeking low-calorie drinks. Beam
Global's acquisition of this premium brand would help leverage the
company's strong distribution and sales network, thereby adding
more consumers and growing this high-quality brand from coast to
coast. The company intends to include a few more drinks under the
Skinnygirl brand, which would facilitate in building a strong
platform to drive future growth.
Going ahead, Fortune has plans to split its three operational
segments into separate entities by the first half of fiscal 2011.
The company is looking for a tax-free spin-off to shareholders of
its Home and Hardware business while exploring the sale or a
tax-free spin-off of its Golf business. This will help the company
to maximize long-term value for its shareholders by separately
focusing on each business.
On the flip side, 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, competition all over the globe has also deepened.
Consequently, the risk associated with operating in such a
competitive environment may undermine the company's future
operating performance.
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