Diageo net profits rise despite some problems

AP News
Posted: Jan 30, 2014 5:37 AM

LONDON (AP) — Drinks company Diageo PLC says net profit rose to 1.6 billion pounds ($2.6 billion) for the six months ending on Dec. 31, up from 1.5 billion pounds in the same period a year earlier despite a slight drop in sales.

Diageo, whose brands include Johnnie Walker, Smirnoff, and Guinness, said Thursday that its net sales were down nearly 1 percent to 5.9 billion pounds. Sales were up 4.6 percent in North America and 1.3 percent in emerging markets despite weakness in China and Nigeria, but down 1 percent in western Europe.

Diageo shares were down 6.1 percent at 1,793 pence in midmorning trading in London.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said Diageo remains a "core long term investment" despite emerging market problems.