Goldman Sachs is upgrading it full-year earnings-per-share estimates for Diageo by 4% in 2002 and by 3.9% the year after.
It repeated its Recommended List rating following Thursday's announcement of half-year pre-tax profit up from £755m to £1.13bn on turnover up 4% to £6.84bn.
Smirnoff Ice drove much of the sales growth in the UK and the company hoped to replicate this in the US where it will soon launch.
Spirits and wines operating profits rose 14% to £693m and operating profit on beer brands, 14% to £141m.
Goldman Sachs said the growth from Diageo's North American and Asia Pacific spirits businesses was better than expected. The only real disappointment was at Burger King.
Burger King's operating profits dropped £6m to £99m in the six months to the end of December. Like-for like restaurant sales fell 6% overall and 7% in the US. Burger King operating profit in North America slumped 12% but elsewhere sales climbed 13% as the 12% growth in restaurant numbers during 2000 offset a 1% drop in like-for-likes. UK like-for-likes fell 2% and in Germany 4%. Spain and Latin America enjoyed strong growth.
It also emerged that Diageo had put plans to float up to 20% of Burger King on the New York Stock Exchange on the backburner.
It is looking, instead, to a full demerger some time over the next few years.
The news came as the £2.5bn burger restaurant business announced the appointment of John Dasburg, president and chief executive of Northwest Airlines, as chief executive.
He will take over from acting chief executive Colin Storm, who will retire. His appointment follows an eight-month search following the resignation of Dennis Malamatinas to join Priceline Europe.
Diageo would avoid a £1bn tax bill in the US if it waits until 2003 for a full merger.
It would also give the new chief executive time to sort out the chain's problems, including a longstanding dispute with a group of US franchisees, and the affect of rising food and staff costs and beef crisis on its fast food operators.
Diageo is still waiting for regulatory approval of its $8.15bn (£5.65bn) acquisition of Seagram's drinks business, with completion expected April 1.
It repeated its Recommended List rating following Thursday's announcement of half-year pre-tax profit up from £755m to £1.13bn on turnover up 4% to £6.84bn.
Smirnoff Ice drove much of the sales growth in the UK and the company hoped to replicate this in the US where it will soon launch.
Spirits and wines operating profits rose 14% to £693m and operating profit on beer brands, 14% to £141m.
Goldman Sachs said the growth from Diageo's North American and Asia Pacific spirits businesses was better than expected. The only real disappointment was at Burger King.
Burger King's operating profits dropped £6m to £99m in the six months to the end of December. Like-for like restaurant sales fell 6% overall and 7% in the US. Burger King operating profit in North America slumped 12% but elsewhere sales climbed 13% as the 12% growth in restaurant numbers during 2000 offset a 1% drop in like-for-likes. UK like-for-likes fell 2% and in Germany 4%. Spain and Latin America enjoyed strong growth.
It also emerged that Diageo had put plans to float up to 20% of Burger King on the New York Stock Exchange on the backburner.
It is looking, instead, to a full demerger some time over the next few years.
The news came as the £2.5bn burger restaurant business announced the appointment of John Dasburg, president and chief executive of Northwest Airlines, as chief executive.
He will take over from acting chief executive Colin Storm, who will retire. His appointment follows an eight-month search following the resignation of Dennis Malamatinas to join Priceline Europe.
Diageo would avoid a £1bn tax bill in the US if it waits until 2003 for a full merger.
It would also give the new chief executive time to sort out the chain's problems, including a longstanding dispute with a group of US franchisees, and the affect of rising food and staff costs and beef crisis on its fast food operators.
Diageo is still waiting for regulatory approval of its $8.15bn (£5.65bn) acquisition of Seagram's drinks business, with completion expected April 1.
