Diageo's Full-Year Profit Rises 1.5%

LONDON (TheStreet) -- Shares of Diageo(DEO), the maker of Johnnie Walker whisky and Guinness beer, were trading lower in London Thursday after the company said full-year profits rose 1.5%, narrowly missing analysts' estimates.

Diageo reported full-year profit of 1.63 billion pounds ($2.53 billion), up from 1.61 billion pounds a year earlier.

Diageo, in a statement Thursday, said its performance was much stronger in the second half than in the first.

"Our performance in the developing markets drove overall growth while markets in North America and Europe remained weak," the world's biggest spirits maker said.

Revenue for the year rose 2% to 9.78 billion pounds on an organic basis.

"The impact of the global economic crisis varied by market and the strength of the recovery appears to be equally variable," said Paul Walsh, Diageo CEO, in a statement. "However, as we demonstrated this year, the global diversity of our business, together with the strength and range of our brands and the agility we have demonstrated gives us confidence that in fiscal 2011 we will be able to improve on the organic operating profit growth we have delivered this year."

Organic operating profit growth for the year was 2%.

Diageo said it is recommending a 6% increase in the final dividend to 23.5 pence a share and expects "to at least maintain this rate of dividend growth in fiscal 2011."

North America net sales fell 3% and operating profit was flat. In Europe, net sales fell 2% and operating profit dipped 1%.

-- Written by Joseph Woelfel

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