Constellation Brands Profits Double

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 [e-mail]

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October 07, 2015 09:05 ET (13:05 GMT)

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