CORRECTED: Constellation Brands profit rises; outlook intact

1/07/2008 - 15:49

(Corrects second paragraph to say Constellation sells rather than makes spirits and beer)

NEW YORK (Reuters) - Constellation Brands Inc posted better-than-expected quarterly earnings on Tuesday on price increases and strong sales of higher-profit products such as Clos du Bois wine, sending its shares up more than 5 percent.

The company, which also sells spirits and beer, affirmed its profit outlook for fiscal 2009.

Net income rose to $44.6 million, or 20 cents per share, in the first quarter ended on May 31 from $29.8 million, or 13 cents per share, a year earlier.

Excluding restructuring costs, acquisition-related expenses and other items, the maker of Robert Mondavi wine and Svedka vodka said it had earned 34 cents per share, beating the analysts' average forecast of 31 cents, according to Reuters Estimates.

Net sales rose to $931.8 million from $901.2 million.

Sales rose 24 percent in the branded wine unit, boosted by double-digit market growth in the United States for lines such as Simi and Kim Crawford. Driven primarily by Svedka, sales in the spirits unit increased 9 percent.

Constellation has been trying to realign its wine business, which is the largest in the world. It recently sold value brands like Inglenook and Almaden and bought more expensive ones like Clos du Bois.

The company also imports Corona and Negra Modelo beers through a joint venture with Grupo Modelo , which is fighting a takeover bid by InBev NV .

Constellation stood by its earnings forecast for fiscal 2009, which ends in February. In June it had forecast profit of $1.68 to $1.76 a share, excluding special items.

The company expects net sales for the year to increase in the mid-single-digit percentage range.

Constellation shares were up $1.07, or 5.4 percent, at $20.93 On morning New York Stock Exchange trade. The stock has traded as high as $26.46 and as low as $17.21 in the past year.

(Reporting by Aarthi Sivaraman; Editing by John Wallace and Lisa Von Ahn)

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