UPDATE 3-Fortune Brands earnings rise, sales up
* Q1 EPS ex-items 49 cents
* Sales up 13 pct to $1.63 billion
* Affirms 2010 EPS outlook of $2.50 to $2.80
* Shares up 0.8 percent (Recasts first sentence, adds CFO comments, details, byline, stock activity)
By Ben Klayman
CHICAGO, April 29 (Reuters) - Consumer products maker Fortune Brands Inc FO.N reported higher quarterly earnings on Thursday helped by strong demand for home remodeling items like cabinetry and Moen faucets.
The company, which earlier this week raised the low end of its full-year profit forecast, also said it was seeing consumers "getting more active," citing stronger-than-expected remodeling activity in the housing sector. Shares were up 0.8 percent.
While it called not raising the high end of its full-year forecast "prudent," Fortune pointed to stronger outlooks in all its businesses, especially home products.
"Although the home product market still faces headwinds, we're seeing continued signs of stabilization," Chief Financial Officer Craig Omtvedt said on a conference call. "Spending on replace/remodel, new construction and cabinetry were all better than we expected in the first quarter."
The maker of Jim Beam bourbon, Moen faucets, and Titleist golf balls said net income was $72.2 million, or 47 cents a share, in its first quarter, compared to $7.4 million, or 5 cents a share, a year earlier.
Excluding items, Fortune earned 49 cents a share.
Sales rose 13 percent to $1.63 billion, reflecting gains for spirits and home products, as well as market share gains.
On Tuesday, the company said first-quarter sales rose 13 percent and that it expected profit of 49 cents per share. Fortune also raised the low end of its full-year profit forecast. [ID:nN27247588]
Comparable net sales rose 7 percent in the spirits business and 13 percent in the home and security business, while golf sales fell 3 percent.
The company said the spirits business gained share in key markets for such brands as Jim Beam, Maker's Mark and Sauza. Omtvedt said Fortune now expects sales in the global spirits market to be a percentage point or so higher than its prior outlook of flat to up 1 percent.
Strong remodeling activity, share gains at home centers and a move by customers to restock faucets and doors drove double-digit sales gains for the company's cabinetry brands, Moen faucets, Therma-Tru doors and Simonton windows.
One analyst on the call described the company's share gains in cabinetry relative to the market "pretty stunning."
The company now says the overall home product market will be up low single digits percentage wise in 2010, instead of its prior outlook for flat to modest growth, he said. However, costs for such commodities as copper, zinc, steel and transportation have seen double-digit increases since the last conference call in January.
The company expects the golf industry to return to growth in 2010 after a double-digit percentage decline in spending last year, Omtvedt said. It still expects worldwide spending on golf equipment will be up a low single-digit rate for the year.
Fortune reiterated its recently updated forecast for 2010 earnings before one-time items in the range of $2.50 to $2.80 a share, a view several analysts called conservative. Its prior forecast had been earnings of $2.30 to $2.80 a share.
"It isn't that we're sitting here hand wringing at the moment," Omtvedt said. "It's just that we want to be prudent ... in terms of what our targets are going to be for the full year." He said the company would revisit the outlook after the second quarter.
The company also said on Thursday that it expects the markets for each of its brand groups will be up at a low-single-digit rate for the year.
Shares of Fortune were up 43 cents to $54.09 in midday trading on the New York Stock Exchange. (Reporting by Ben Klayman, editing by Dave Zimmerman and Gunna Dickson)
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