Diageo Meets Expectations, Cuts Forecast; Johnny Walker Blows Past £1B in Sales

Diageo hit the high end of its range, as expected, reporting 60.6 pence earnings per share. Profits were up 2 percent and sales were up 8 percent, largely thanks to increased Scotch whisky sales in Latin America and double digit growth in its Guinness beer sales. Johnny Walker cracked the £1 billion sales mark, on a 12 percent increase.

Still, the company lowered its 2009 forecast from 9 percent growth to 7-9 percent growth. Finance Director Nick Rose cited weakening global economy and rising commodity prices, which keep creeping up.

Diageo’s Rose said input costs such as grains and energy rose 90 million pounds, or 3 percent of its cost base in the reported year, and he expected a bigger increase of 150 million pounds, or 5 percent of its cost base, in the coming year.

Market non-reaction, shares were up 0.4 percent to 983-1/2 by late afternoon. If history is a guide, Diageo will try to pass through some costs to customers with higher prices.

~ by whisky1 on August 28, 2008.

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