) is scheduled to report its financial results for the first
quarter of fiscal 2013 before the opening bell on August 29, 2012.
The current Zacks Consensus Estimate for the quarter is 62 cents
per share. For the quarter under review, revenue is expected to be
$893 million, according to the Zacks Consensus Estimate.
With respect to earnings surprises, Brown-Forman has missed the
estimate thrice over the trailing four quarters in the range of
flat to negative 7.5%. The average surprise over the last four
quarters remained at negative 4.4%.
Fourth-Quarter 2012 - A Synopsis
Brown-Forman's adjusted earnings of 73 cents per share for the
fourth quarter of fiscal 2012 missed the Zacks Consensus Estimate
of 76 cents and declined approximately 5.2% from the year-ago
earnings of 77 cents. A higher excise tax along with increased
operating expenses affected the company's bottom line.
Brown-Forman's reported net sales inched up 1% to $801.3
million, missing the Zacks Consensus Estimate of $805 million.
However, the company's underlying net sales registered 10% growth
year over year.
The analysts following the stock expect Brown-Forman to post
first quarter earnings of 62 cents a share, higher than 54 cents
delivered in the prior-year quarter. Currently, the Zacks Consensus
Estimate ranges between 57 cents and 66 cents a share.
For fiscal 2013, the Zacks Consensus Estimate stands at $2.61
per share, higher than the year-ago fiscal earnings of $2.37. The
current estimate ranges between $2.57 and $2.67 per share.
Earnings Estimate Revisions
For the first quarter of fiscal 2013, of the 6 analysts
providing estimates, none has revised their estimates in either
direction over the last 7 and 30 days.
For fiscal 2013, 1 analyst downgraded its estimate in the last
30 days, while no movement seen in the opposite direction. In the
last 7 days, of the 6 analysts providing estimates, none has
revised their estimates in either direction.
The magnitude of estimate revisions for Brown-Forman depicts a
neutral outlook for the first quarter and fiscal 2013. Over the
last 7 and 30 days, estimates for the upcoming quarter and fiscal
2013 have remained unchanged at 62 cents and $2.61 per share,
Brown-Forman is one of the leading producers and distributors of
premium alcoholic beverages in the world. The company commands a
strong portfolio of globally recognized brands, such as Jack
Daniel's, Finlandia, Southern Comfort and Canadian Mist. We believe
this provides a competitive edge to the company and bolsters its
well-established position in the market.
Moreover, we believe Brown-Forman's strategy of expanding Jack
Daniel's market share in developed markets, such as France and the
U.S., and emerging markets including Russia, Poland and Mexico,
where the whiskey category is in early stages of development, will
boost its top line.
However, apart from macroeconomic headwinds, distilled spirits
are subject to excise tax in various countries. Rising fiscal
pressure in the U.S., European and many emerging markets may lead
to increasing risk of a potential excise tax on spirits by the
governments of respective countries. The effect of any excise tax
increase in future may have an adverse effect on Brown-Forman's
Above all, the company faces intense competition from other
well-established players in the industry, including
Constellation Brands Inc.
). Moreover, Brown-Forman encounters competition from local and
regional players in the respective countries. Consequently, this
may dent the company's future operating performance.
Currently, Brown-Forman has a Zacks #3 Rank, which implies a
short-term Hold rating. Moreover, we maintain a long-term 'Neutral'
recommendation on the stock.
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