The Frankenstein conglomerate that is Fortune Brands (NYSE:FO) made a number of smart business moves in the first quarter of 2009, and management feels that the bulk of recession-related challenges are now in the rear-view mirror. While I'm feeling less concerned about the company's near-term prospects than I previously expressed, I still think it's premature to raise a glass to smoother sailing ahead.

First, the good news. Management prudently hacked away at excess capacity in the home products division, shuttering plants and selling off a "non-core product line." In one of those financial ironies you just have to love, the total cost of cutting costs took a big toll, shaving $0.30 of pre-charge earnings per share down to $0.05 per share. However, this move should lead to improved profitability, which makes this quarter's earnings hit a matter of short-term pain for long-term gain.

As a shareholder, you may be more irked by the 57% quarterly dividend cut. Indeed, dividend reductions in general go down about as well as a swig from your great-uncle's basement still, and it's no comfort to be among the ranks of the dividend downtrodden who hold riskier names like Capital One Financial (NYSE:COF) and PNC Financial Services (NYSE:PNC). But given that a recession is generally a tough time to hook homeowners on shiny faucets and sell golfers on a new set of clubs, I fully support this step toward cash conservation. And according to management, combined cost-cutting measures will bring 2009 free cash flow after dividends into the neighborhood of $400 million, versus a prior estimate of $100 million to $200 million.

Now, some words of caution on why company maneuvers may not mean that investors are out of the woods. Compared to steeper declines in the home-and-hardware and golf units, net sales in Fortune's spirits division were down only 3%. That's impressive, but to get super-excited about those results would be like mashing together Diageo (NYSE:DEO), Home Depot (NYSE:HD), and Callaway Golf (NYSE:ELY), then telling everyone that you've found a stock market cure to the economy's hangover.

Finally, we have the minor issue of debt. Moody's sees Fortune's debt-to-EBITDA ratio pushing 4 by year-end, and is considering a one-notch rating downgrade. Plus, the company has a $2 billion revolving credit line coming due in October of 2010. If the economy -- and housing in particular -- is still sputtering along at that point, refinancing could come with unfavorable rates.

Will Fortune survive this recession? You bet. Should you buy shares now? Only if you like morning-after regret. Based on the top end of management's 2009 pre-charge earnings guidance, the stock currently trades at a 2009 P/E of roughly 16.8. That's in line with the stock's 2007 average P/E and above the 2006 average P/E of 14.5. Sorry, folks, but in light of the company's headwinds, that's no happy-hour special.

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Fool contributor Mike Pienciak ain't no fortunate son. He does not hold shares in any company mentioned. Fortune Brands is a Motley Fool Stock Advisor pick. The Home Depot is a Motley Fool Inside Value selection. Diageo is a Motley Fool Income Investor recommendation. The Fool has a disclosure policy. Try any of our Foolish newsletters today, free for 30 days.