Australia's Foster's H2 profit falls on wine woes

"People are looking at the continuing strength of the beer business -- higher margins," said Hugh Giddy, managing director of Cannae Capital Partners, explaining the share price rise.

Foster's, with an Australian beer market share of 50 percent, also said its core Victoria Bitter brand reversed a long-running sales decline and actually grew in the year to June 30.

In the Americas, Foster's said wine sales fell 8.9 percent in constant currency terms, hit by a slowdown in consumer spending and reduced demand for Australian wine. Taking into account the gains of the Australian dollar, sales fell 19.5 percent and earnings fell 41 percent for the year.

"We are making good progress with our wine review but won't be commenting on our analysis or conclusions until the review is completed," acting chief executive Ian Johnston said.

Full-year net profit before one-off items slipped to A$713.2 million from A$716.1 million a year ago, above analyst forecasts of A$704.4 million.

Foster's said it was making progress in the search for a new chief executive, after Trevor O'Hoy stepped down when the company announced the wine review and writedowns of A$730 million in June.

Foster's shares last traded up 2.1 percent at A$5.44.

(Additional reporting by Sonali Paul; Editing by Jonathan Standing and Sonya Hepinstall)