Winemaker Mondavi Feels Slowdown’s Effects

Winemaker Robert Mondavi Corp. on Thursday warned that earnings for the current quarter would be 10% lower than Wall Street had forecast as the economic slowdown begins to hurt premium wine sales.

The Oakville, Calif.-based company also lowered its forecast for earnings per share for the full 2002 fiscal year by a smaller margin and maintained its earnings guidance for the fiscal year ended June 30.

Mondavi said the wine business often lags the rest of the U.S. economy into recession and is quicker to recover, the basis for projecting that the worst of the downturn will come in the quarter just begun as shipments slow and distributors reduce inventories.

The company said first-quarter earnings per share would be flat from the year-earlier, adjusted figure of 70 cents, which excluded some inventory charges. Analysts, on average, had been expecting earnings per share of 77 cents.

Mondavi sees adjusted fourth-quarter earnings of 71 cents per share and full-year earnings for fiscal 2001 of $2.95 per share, in line with analysts’ consensus expectations, according to First Call/Thomson Financial.

The company lowered its forecast for fiscal 2002 earnings per share to reflect slower growth of between 13% and 15% from the prior year, implying full-year earnings per share of between $3.33 and $3.39.

Shares of Mondavi slipped 80 cents, or 1.9%, to close at $41.10 on Nasdaq. The stock has fallen sharply since peaking at $51.51 on June 5 and is down 23% since the start of the year.