Treasury Wine Estates' share price has plunged into the red after the winemaker missed half-year earnings expectations, despite a solid profit boost.
Driven by growth in luxury wine sales, net profit increased 18.7 per cent to $193.7 million for the half ending December 31, but analysts had predicted it would reach $205.7m.
Shares in the Penfolds winemaker had dropped 6.1 per cent to to $13.45 by 2pm on Wednesday.
The company awarded shareholders a 16.7 per cent increase in interim dividends to 18c, representing a payout ratio of 67 per cent.
Price increases and supply chain cost-cutting offset the effects of rising inflation.
"Another good result, albeit below consensus forecasts, continues to underpin confidence that Treasury remains on track to deliver strong earnings growth over 2023 and 2024," said E&P Financial retail analyst Phillip Kimber.
"However, given the strong near-term share price and first-half results missing forecasts, the stock may drift off following the result."
Mr Kimber expects a modest one-to-two per cent downgrade to consensus forecasts for the financial year.
Treasury has predicted a full-year earnings margin of 23 per cent.
Chief executive Tim Ford was pleased with the 17 per cent earnings increase, which he attributed to improved margins and revenue per case.
"Our luxury wine portfolios in particular continue to perform exceptionally well across all markets and channels, and the fundamentals of the category are expected to remain strong at these higher price points," he said.
"We consider this set of results to be an important and additional proof point of our teams' ability to navigate the changing and variable economic, consumer and market dynamics, whilst maintaining our focus on the delivery of our financial objectives."
Treasury shares had been on a tear since the beginning of the year, reaching an all-time high of $14.84 in early February amid rumours that China was considering scrapping its unofficial ban on imported Australian wines.
