Fortune Brands (FO)Price $65.951st Quarter 20085/9/2008Revenues for the quarter were 1.806 billion this is a decrease from 1.948 billion last yearThis makes TTM revenues 8.46 Billion or $54.13 per shareThe quarter diluted EPS were $0.77 which were the same as last year making TTM EPS 4.79They paid out $0.42 dividendTheir cash on hand was 179 million Debt rose from 4.373 billion to 4.684 billionThe cash flow is historically negative from the first quarter and was true this quarter also. However CFFO was 40 million better than last year so TTM CFFO rose to 809.4 million or $5.18 per shareThe PE range for the time from March 31 to May 9 was from 14.03 to 15.34The PS ratio ranged from 1.24 to 1.36 during the same time periodThe TD range was 7% to 7.7% Fortune Brands has Golf equipment, Liqueur, and Home furnishings businesses. I think that they are still waiting for a bottoming of the housing market to bring up their home furnishing business which include Moen Faucets. Their golf business which includes Titleist is staying steady and a rebound in the overall economy would help this side. Then there is the alcohol. Jim Beam and its family of brands as well as several international brands makes FO one of the leaders in this industry. I recently heard that Stolichnaya vodka out of Russia could be coming up for sale at an estimated $3 billion. Brown Forman and FO could be the top bidders for Stoli. FO lost out on Absolut last month to Pernod Ricard. Pernod over paid for Absolut which makes me very happy that FO did not get the brand. Stoli is truly the up and coming brand of the Vodka group. They have excelled at producing a better product in just as diverse flavors as the traditional leader in the Vodka world, Absolut. A successful bid could be a great boom to FO till the other markets improve.Debt increased this quarter as it did last year. The first quarter last year FO had over $6 billion in debt now it is down to $4.7 billion of self financed debt. Paying off $1.3 billion in debt in one year was made possible through the sale of their wine holdings. This had lead to a slight loss of revenue but has helped improve cash flow. This is another reason I think they should pursue Stoli when they come up for sale. I am holding my Fo shares and buying more on the dips because I believe that when the economy rebounds this company will be at the front of growth prospects and they are very good at surviving if not thriving during a recession. CRL
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