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Constellation Q4 profit surges on higher beer sales

Rochester Business Journal
April 9, 2014

Constellation Brands Inc. reported double-digit increases in its fourth-quarter and year-end financial results Wednesday. The growth in sales, profit and earnings per share were driven by the Victor firm’s beer business, which was boosted last year by a multi-billion acquisition.

For the quarter, Constellation Brands reported net income of $157 million, or 79 cents a diluted share, versus net income of $81 million, or 43 cents a diluted share, the prior year. On a comparable basis, earnings per share from the most recent quarter were 81 cents.

Sales rose 86 percent to $1.29 billion, from $696 million.

Analysts polled by Thomson Reuters expected the business to report earnings per share of 76 cents on sales of $1.29 billion.

Net sales for the beer segment increased 13 percent primarily due to volume growth driven by strong consumer demand, the company reported. Wine and spirits net sales on an organic constant currency basis increased one percent, as volume growth was mostly offset by unfavorable mix and higher promotional spending, Constellation Brands said.

The results are impacted by the acquisition last June of Grupo Modelo S.A.B. de C.V.'s U.S. beer business from Anheuser-Busch InBev SA for some $5.3 billion.

"This has been another exciting year for Constellation," said Robert Sands, Constellation Brands’ president and CEO, in a statement. "We kicked off the year with a smooth transition for our transformational beer acquisition. We are executing an effective integration plan as we work diligently to expand our new brewery in Mexico while maintaining the strong momentum of our U.S. commercial beer business.”

For the year, Constellation Brands reported net income of $1.9 billion, or $9.83 a diluted share, versus net income of $388 million, or earnings per share of $2.04. On a comparable basis, earnings per share for fiscal 2014 were $3.25.

Sales were up 74 percent to $4.87 billion, from $2.80 billion the previous year.

For the year, analysts expected Constellation Brands to report earnings per share of $3.19 on sales of $4.87 billion.

The company reported free cash flow of $603 million, up from $494 million during the previous year.

Constellation Brands expects fiscal 2015 earnings per share in the range of $3.95 to $4.15.

Shares of Constellation Brands (NYSE:STZ) were trading midday at $79.58, down more than 2 percent from Tuesday’s close of $81.48.

The firm ranked 12th, with roughly 620 local workers, on the most recent Rochester Business Journal list of manufacturers.

 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail

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