Constellation Brands Profits Double
October 07 2015 - 9:20AM
Dow Jones News
Constellation Brands Inc. on Wednesday said profits more than
doubled in its latest quarter and raised its earnings outlook for
the current year as the liquor company continues to benefit from
strong beer sales.
Shares of Constellation, up 54% over the past 12 months through
Tuesday, rose 3.8% to $136.25 in premarket trading.
Constellation, the third-largest beer company by volume in the
U.S., has benefited in recent quarters from becoming the full
distributor of Corona and Modelo in the U.S.
The number of drinking-age Hispanics in the U.S. is expected to
grow by more than one million annually in the coming years,
outpacing other demographic groups, and many of those drinkers have
been choosing to buy Mexican beers such as Corona and Modelo
Especial, according to the National Beer Wholesalers
Association.
Constellation's net beer sales climbed 14%, propelled partly by
demand for new Corona cans. The wine and spirits segment, which has
struggled to deliver much growth in recent quarters, had sales
increase 3%.
Results from Constellation Brands come amid a consolidation push
in the beer industry. Earlier Wednesday, Anheuser-Busch InBev NV
went public with an offer valued at about $104 billion to buy
SABMiller PLC, in a bid to combine the world's top two brewers.
Meanwhile, Diageo PLC and Heineken NV announced an exchange of
emerging-market brewing assets.
For the quarter ended in August, its second of the fiscal year,
Constellation reported a profit of $302 million, or $1.49 a share,
up from a year-earlier profit of $195.8 million, or 98 cents a
share. Excluding certain items, per-share profit rose to $1.56 from
$1.11 a year earlier.
Revenue grew 8% to $1.73 billion from $1.6 billion.
Analysts anticipated $1.32 in earnings per share and $1.73
billion in sales.
In the wake of the better-than-expected profit, the company said
it now expects per-share earnings for the year ending in February
between $5 and $5.20 on an adjusted basis, up from a previous range
of $4.80 to $5.00.
Analysts, on average, were expecting $4.98 a share.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
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(END) Dow Jones Newswires
October 07, 2015 09:05 ET (13:05 GMT)
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