Alcoholic beverage maker Brown-Forman Corp. (BF-A,BF-B) will issue forth its fourth-quarter results before market opens on June 10, with analysts projecting earnings of $0.49 per share on revenues of $677.85 million.
Brown-Forman is a producer and marketer of fine quality beverage alcohol brands, including Jack Daniel's, Southern Comfort, Finlandia, Canadian Mist, Fetzer, Korbel, Gentleman Jack, el Jimador Tequila, Tequila Herradura, Sonoma-Cutrer, Chambord, Tuaca, Woodford Reserve, and Bonterra.
Coerced by the teetering economic condition, Brown-Forman has been implementing several initiatives to reduce costs during fiscal 2010, which begins May 1, 2009. Included among the cost-cutting plans is a reduction in workforce, affecting about 250 employees, out of its global workforce of 4,100 people. The company noted that the majority of job cuts will occur in Mexico and the U.S., with fewer positions eliminated in Europe and the Asia Pacific region.
Brown-Forman expects that these actions will enable the company to save $15 million - $25 million in fiscal 2010. The company also estimates a fourth-quarter charge of about $0.05 to $0.07 per share for severance and related costs associated with the workforce reduction and early retirement program.
While releasing third-quarter scorecard, the Louisville, Kentucky-based Brown-Forman revised down its full-year earnings forecast range to $2.70 - $2.90 per share from its prior range of $3.00 - $3.20 per share, reflecting the company's cautious outlook about the implausible global economic environment and its continued effect on its business throughout the remainder of fiscal year.
For the preceding third quarter, the company posted net income of $123.4 million or $0.81 per share, compared to $115.9 million or $0.75 per share in the prior year quarter. Quarterly net sales declined 11% to $784.1 million from $877.4 million in the previous year.
Among Brown-Forman's rivals, Constellation Brands Inc. (STZ,STZ-B) incurred a fourth-quarter net loss of $406.8 million, narrower than the previous year's loss of $834.8 million, reflecting lower one-time charges compared to last year. Net loss per Class A share was $1.88, compared to a loss of $3.91 Class A per share in the year ago quarter. On a Class B share basis, loss narrowed to $1.71 from prior-year's loss of $3.55. Total sales were $964.9 million, down from $1.14 billion a year earlier. Quarterly net sales fell 17% to $735.1 million from $884.4 million in the prior-year quarter.
For fiscal 2010, Constellation Brands expects reported earnings to range between $0.97 and $1.07 per share, including about $106 million charges related to planned operational changes and inventory step-up costs. On a comparable basis, earnings are expected to be in the range of $1.60 - $1.70 per share.
Last month, Diageo Plc (DEO,DGE.L) reported a 11% rise in the third-quarter sales, reflecting the impact of exchange rates movements since the comparable period. However, on an organic basis, quarterly sales dropped 7%, largely hurt by the planned stock reductions in the company's US spirits and wine distributors. Further, Diageo backed its fiscal-2009 organic operating profit growth outlook in the range of 4%-6%.
BF-A closed Tuesday's trading session at $48.33, while BF-B closed trading at $45.27.
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