Diageo Shares Fall On Failure To Raise Earnings Guidance Despite Revenue Growth

The world's top alcoholic beverage maker by sales, Diageo, said Thursday revenue growth accelerated during the second half of its current fiscal year, but the company left its earnings forecast of 8% growth intact, due to rising marketing costs and unfavorable exchange rate movements. The company attributed its strong revenue growth to international sales strength of its Johnnie Walker whiskey, Captain Morgan rum and Guinness stout brands. Shares responded negatively to the statement in London trading, down 2.44% as of 11:48 a.m. BST, as investors registered disappointment the company didn't raise its earnings guidance despite its strong revenue growth. Morgan Stanley analyst Jonathan Cook sent a note to clients saying, "A strong and indeed accelerating top-line performance but with no corresponding increase in profit guidance leaves us feeling flat."

Sources: Press Release, Bloomberg, MarketWatch, Reuters, Hemscott/Thomson Financial
Commentary: Constellation Brands Vs. Diageo: A Good Stock Picking Study • The Power of Multiple Expansion: Diageo - A Case in Point • Cramer's Take on DEO
Stocks/ETFs to watch: Diageo plc (DEO). Competitors: Constellation Brands (STZ). ETFs: Europe 2001 HOLDRS

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