Published: Sun, April 07, 2019
Finance | By Loren Pratt

Constellation climbs after reporting profit beat and wine sale

Constellation climbs after reporting profit beat and wine sale

Constellation Brands Inc on Thursday reported quarterly sales and profit well above analysts' estimates, as the brewer sold more of its popular Corona and Modelo beers, sending its shares up about 3% before the bell.

Beer continues to lead the way for Constellation, with sales up 11.6% to $5.2 billion and operating income increasing 11% to $2 billion. The company's top line growth was driven by a 9.3% rise in its Beer segment's sales to $1.1 billion driven by strength in the Modelo and Corona brand families. The company is expected to report earnings of $1.71 per share on $1.73 billion in revenue, according to analysts polled by Bloomberg.

Constellation retains a host of brands including Robert Mondavi, Meiomi and Kim Crawford.

The company said it expects adjusted earnings in the range of $8.50 to $8.80 per share, excluding its earnings from pot producer Canopy Growth Corp, compared with $9.34 in fiscal 2019. TIAA CREF Investment Management LLC now owns 1,299,152 shares of the company's stock valued at $280,123,000 after acquiring an additional 644,939 shares during the last quarter.

Constellation's wine and spirits portfolio was roughly flat over the 12-month period, with net sales down 0.2% to $2.9 billion and operating income falling 2.9% to $771 million.

The results were published a day after Constellation announced a deal to offload around 30 of its wine and spirits brands and six U.S. winemaking facilities to E & J Gallo Winery for $1.7 billion.

-Constellation raised its profile previous year by investing in Canopy Growth Corp., the world's most valuable marijuana company.

In 2016, the company divested its Canadian wine business to Ontario Teachers' Pension Plan for about 1.03 billion Canadian dollars (772 million US dollars). The company expects the deal to close at the end of the first quarter of fiscal 2020.

Constellation Brands Inc. shares were trading at $187.27 per share on Thursday morning, up $7.58 (+4.22%).

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