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Brown-Forman (BF.B) Q3 Earnings Beat, Implements Stock Split

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Brown-Forman Corporation (BF.B - Free Report) , the world’s leading producer and distributor of premium alcoholic beverages, came out with third-quarter fiscal 2018 results, wherein adjusted earnings of 44 cents rose 15.8% year over year and came ahead of the Zacks Consensus Estimate of 41 cents. Earnings per share for the quarter takes into account the five for four stock split, which was implemented on Feb 28, 2018.

Earnings Estimate Revision: The Zacks Consensus Estimate for fiscal 2018 has been stable in the last 30 days. In the trailing four quarters, excluding quarter under review, the company fell short of the Zacks Consensus Estimate by an average of nearly 7%.

Revenues: Net sales advanced 9% to $878 million, after deducting excise taxes. However, on an underlying basis, sales grew 6%. The company’s sales, before accounting for excise taxes, came in at $1,156 million, up 9% from the prior-year figure of $1,059 million. The Zacks Consensus Estimate was pegged at $872.3 million.

Key Events: On Jan 23, the company declared a five for four stock split, which was paid on Feb 28, 2018. In connection to the stock split, the company also announced a special dividend of $1.00 on split adjusted Class A and Class B stock. This dividend will be paid on Apr 23, to shareholders with record as on Apr 2.

Further, the company declared a quarterly cash dividend of 15.8 cents per share, on a split-adjusted basis, which is payable on Apr 2, to shareholders of record as on Mar 5.

Outlook: For fiscal 2018, management now expects a 6%-7% increase in underlying sales. Further, underlying operating income is anticipated to increase in a range of 8%-9%. The company now projects fiscal 2018 earnings in the range of $1.43-$1.48 per share, including 3 cents expense from tax reform, 10 cents expense due to the establishment of a foundation and 3 cents benefit from foreign exchange.

Zacks Rank: Currently, Brown-Forman carries a Zacks Rank #3 (Hold) which is subject to change following the earnings announcement.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Check back later for our full write up on Brown-Forman’s earnings report!

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