Brown-Forman Chugs Along: Fool by Numbers

On Tuesday, liquor and spirits company Brown-Forman (NYSE: BF-A  ) (NYSE: BF-B  ) released third-quarter results for the period ended Jan. 31. Here are the quick and dirty details.

• Total sales grew 20.3%, due in part to the acquisition of Mexican tequila producer Casa Herradura, currency benefits, and strong international growth of Jack Daniel's.
• Reported diluted earnings fell 13.3%, but management's estimate of "underlying earnings per share" resulted in a 12% gain.
• Management is projecting full-year 2007 earnings of $3.20 to $3.30 per share, including a $0.08 gain from the sale of an Italian winery. This would represent 10% to 14% year-over-year growth.
• Brown-Forman and peer Diageo (NYSE: DEO  ) have both earned the highest rating -- five stars -- in the Motley Fool CAPS investor-intelligence database. Wine and spirits competitor Constellation Brands (NYSE: STZ  ) (NYSE: STZ-B  ) is also favorably ranked, with a four-star rating, while king of beers Anheuser-Busch (NYSE: BUD  ) has a three-star rating. Feel free to add your opinion on these companies and more.

(Figures in millions, except per-share data)

Income Statement Highlights

	Avg. Est.	Q3 2007	Q3 2006	Change
Sales	$707	$755	$628	20.3%
Net Profit	--	$112	$120	(7.1%)
EPS	$0.82	$0.85	$0.98	(13.3%)

*Three months ended Jan. 31, 2007 and 2006.

Get back to basics with a look at the income statement.

Margin Checkup

	Q3 2007	Q3 2006	Change*
Gross Margin	51.31%	52.71%	(1.40)
Operating Margin	22.36%	26.34%	(3.98)
Net Margin	14.79%	19.14%	(4.35)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2007	Q3 2006	Change
Cash + ST Invest.	$404	$596	(32.3%)
Accounts Rec.	$485	$313	55.2%
Inventory	$701	$520	34.8%

Liabilities	Q3 2007	Q3 2006	Change
Accounts Payable	$364	$261	39.3%
Long-Term Debt	$369	$352	4.9%

Learn the ways of the balance sheet.

Cash Flow Highlights

	YTD 2007	YTD 2006	Change
Cash From Ops.	$278	$243	14.1%
Capital Expenditures	$39	$33	18.8%
Free Cash Flow	$239	$211	13.3%

*Nine months ended Jan. 31, 2007 and 2006.

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Related Foolishness:

• Brown-Forman's Whiskey Road
• Diageo: Drinking In the Profits
• 3 More Kings of Cash
• A Toast to Jack Daniel's

Anheuser-Busch is an Inside Value recommendation. To find more top-shelf stocks at bargain-bin prices, sign up today for a free 30-day guest pass. Diageo is an Income Investor selection.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Ryan Fuhrmann is long shares of Diageo but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.