* Q2 adj EPS 98 cents vs Street view 76 cents
* Net sales up 9 pct to $1.90 bln
* Sees '10 EPS $2.60-$2.90; prior view $2.50-$2.80
* Shares up 0.8 pct; S&P down 0.2 pct
(Adds CFO comment)
By Martinne Geller
NEW YORK, July 30 Consumer goods maker Fortune
Brands Inc FO.N reported higher-than-expected quarterly
profit on Friday as sales of faucets, windows and doors were
strong ahead of the expiration of a tax credit.
The maker of Jim Beam bourbon, Moen faucets and Titleist
golf equipment also raised its full-year profit forecast.
The company said second-quarter profit was boosted by 10
cents to 15 cents per share as the expiration of the U.S.
homebuyer tax credit, plus the timing of spirits orders, pulled
some demand into the second quarter at the expense of the third
In addition, Fortune said the second half of the year would
be hit by higher costs for transportation and raw materials
like zinc and brass, the stronger U.S. dollar, annualizing cost
savings and increasingly difficult comparisons with last year's
Still, Fortune forecast 2010 earnings of $2.60 to $2.90 per
share, up from a prior forecast of $2.50 to $2.80.
Morgan Stanley analyst Dara Mohsenian said the raised
guidance came despite a sequential weakening of the U.S.
housing market since the company's first-quarter report.
"We view the increase in guidance ... positively,"
Mohsenian said in a client note.
Fortune shares were up 0.8 percent at $43.71 on the New
York Stock Exchange. That was slightly better than the Standard
& Poor's 500 Index .SPX, which was down 0.2 percent after
data showed U.S. economic growth slowed more than expected in
the second quarter, underscoring worries about the recovery.
Fortune said it expects the global market for spirits to
grow 1 percent to 2 percent this year, with the market for home
and security goods up at a low single-digit rate.
"Given the pull-forward in demand due to the expiration of
the home buyer tax credit and continuing signs of consumer
caution, we believe the market's growth in the second half will
be at a more moderate pace than it was in the first," Chief
Financial Officer Craig Omtvedt said on a conference call.
BY THE NUMBERS
Fortune earned $227.4 million, or $1.48 per share, in the
second quarter, up from $99.8 million, or 66 cents per share, a
Excluding gains from the sale of its Cobra golf brand and
the resolution of tax audits and lower year-over-year charges,
earnings were 98 cents per share. On that basis, analysts on
average were expecting 76 cents, according to Thomson Reuters
Net sales rose 9 percent to $1.90 billion. Comparable
sales, which exclude excise taxes, foreign exchange and
acquisitions and divestitures, rose 5 percent in the spirits
business, 12 percent in the home and security business, and 8
percent in the golf business.
In the spirits business, case volume rose at a
Fortune said it expects the operating income of its spirits
business to experience a hit of $10 million to $15 million in
the second half of the year due to foreign exchange rates.
The company also forecast 2010 free cash flow $525 million
to $600 million.
(Reporting by Martinne Geller; editing by Dave Zimmerman and