Pernod Ricard stuck to its goal of boosting recurring net profit to over 1 billion euros ($1.28 billion) in fiscal 2008/09 as recession-hit consumers continue to spend money on wine and spirits.
Shares in the group, the world's No 2 drinks maker whose brands include Absolut Vodka and Jameson whiskey, rose as much as 9.5 per cent, making them the top gainers on a 2 per cent firmer FTSEurofirst 300 index of top European shares.
"Although visibility is limited for the second half of the year, we anticipate that the wines and spirits sector will on the whole continue to show excellent resilience," Pernod said in a statement on Friday.
The company also said it expected to continue to gain market share "in many countries" in the second half.
Pernod's optimism contrasted with a more downbeat forecast from arch rival and world No 1 Diageo, which cut its profit target and launched a cost savings programme on Thursday, warning that sales growth was slowing markedly, particularly in Europe.
Pernod posted a 24 per cent rise in first-half recurring operating profit to 1.2 billion euros, above the average forecast of analysts polled by Reuters Estimates of 1.16 billion.
First-half sales rose 13 per cent to 4.21 billion euros, Pernod said. Group net profit rose 5 per cent to 615 million euros in the period, rising 15 per cent to 685 million based on recurring operations.
The group added that it continued to expect "strong organic growth" in recurring operating profit for the full year, but trimmed its forecast to a 5-8 per cent rise from 8 per cent previously.
Currency exchange rates would have a positive impact of 80-110 million euros, it said.
The French drinks group said it expected to achieve free cash flow from recurring operations of close to 1 billion euros in 2008/09 and in excess of 1 billion over 2009/10 and 2010/11.
Net debt was almost 13 billion euros at the end of December, Pernod said, adding that it aimed to improve its net debt to core profit ratio to close to 4 by June 2011. The average cost of debt would be less than 5 percent for 2008/09 and close to 4 percent for 2009/10, the group added.
"We view the first-half performance and the outlook as a powerful retort to those concerned by the level of debt at the company," Collins Stewart analyst Rob Mann said in a note.
"The H1 operating performance in profitability terms is impressive."
London-based Diageo, which makes Johnnie Walker whisky, Smirnoff vodka and Guinness beer, on Thursday cut its year to June target for operating profit growth to 4-6 percent from 7-9 per cent after first half underlying sales growth slowed to 3 percent from a first-quarter rise of 6 per cent.
European drinks companies Heineken and Carlsberg are due to publish results next week.
"The extent to which wholesaler funding issues will cloud the second half is less clear than was the case in Diageo's statement...but this looks well captured by (Pernod's) broadening of the organic operating profit guidance," Mann added.
By 0934 GMT, shares in Pernod were 5.1 per cent higher at 48.43 euros and Diageo flat at 877 pence, against a DJ Stoxx European retail sector up 1.8 per cent.
Pernod said its top performing brands in the first half were Martell, Jameson and Glenlivet. Malibu, Kahlua and Perrier Jouet, meanwhile, were "adversely affected by market conditions and inventory reductions" in the United States.
The Absolut brand suffered a slight decline in the US, but had strong growth in markets from Spain to the UK to Brazil, Pernod said.