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Originally published Wednesday, August 25, 2010 at 11:54 PM

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Diageo full-year profit up 1.5 percent

Diageo PLC, the world's biggest spirits maker, said Thursday that its full-year profit rose 1.5 percent as sales in emerging markets fueled a rebound from a weak first half.

Associated Press Writer

LONDON —

Diageo PLC, the world's biggest spirits maker, said Thursday that its full-year profit rose 1.5 percent as sales in emerging markets fueled a rebound from a weak first half.

For the year ending June 30, the maker of Johnnie Walker whisky, Smirnoff vodka and Guinness stout reported a net profit of 1.63 billion pounds ($2.54 billion), compared to 1.61 billion pounds a year earlier, the company said.

In the first half of the year, Diageo reported a 10 percent drop in profit. It did not break out results for the second half in Thursday's report.

Revenue for the full year rose 2 percent to 9.78 billion pounds on a comparable basis, which strips out currency fluctuations, acquisitions and disposals.

Diageo said this year's gains came from a strong performance in emerging markets, while North American and European markets were weak.

The company raised its final dividend by 6 percent to 23.5 pence per share.

"Although the outlook statement appears to be relatively positive, we believe that in terms of the share performance today the issue is likely to be how much the market was factoring in growth ahead of the 2 percent reported in 2010," said Phil Caroll, analyst at Shore Capital.

"We suspect this statement is not as strong as some investors would have liked."

Diageo shares were down 0.5 percent at 1,061 pence in early trading on the London Stock Exchange.

"The impact of the global economic crisis varied by market and the strength of the recovery appears to be equally variable," said Chief Executive Paul Walsh.

"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."

The company's international division, including Latin America, Africa and the Middle East, racked up a 13 percent gain in net sales - excluding excise taxes - and a 25 percent boost in operating profit. The Asia-Pacific region reported a 6 percent rise in operating profit on a 1 percent gain in net sales.

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

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