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Q2 sales, profits surge at Constellation Brands

Rochester Business Journal
October 3, 2013

Constellation Brands Inc. reported Thursday increases in second-quarter sales and profit, driven by its recent multibillion-dollar beer acquisition.

The Victor, Ontario County-based firm reported net income of $1.52 billion, or $7.74 a share, compared with $124.6 million, or 71 cents a share, a year earlier, prior to the acquisition. Excluding onetime items, earnings were 96 cents a share.

Sales rose to $1.46 billion, up 109 percent from $698.5 million in the 2012 period. The sales increase largely was due to its recent acquisition.

Analysts polled by Thomson Reuters expected Constellation Brands to report earnings per share of 88 cents on sales of nearly $1.53 billion.

For the quarter, the company’s beer segment revenues increased 3.4 percent to $815 million from $788 a year ago. Wine and spirits sales, however, were down 1 percent.

The significant increase for second-quarter consolidated net sales was driven by $763 million of incremental net sales related to the consolidation of Crown.

Constellation Brands completed the acquisition in June of Grupo Modelo S.A.B. de C.V.'s U.S. beer business from Anheuser-Busch InBev SA for some $4.75 billion. The transaction included full ownership of Crown Imports LLC, which gave Constellation complete, independent control of all aspects of the U.S. commercial business; a brewery in Nava, Mexico; an exclusive perpetual brand license in the United States to import, market and sell the Corona and Modelo brands carried by Crown; and the freedom to develop brand extensions and innovations for the U.S. market.

"We began the quarter by closing the beer transaction and starting the process of integrating our newly acquired brewery into our operations," said Robert Sands, Constellation Brands president and CEO, in a statement. "Our beer supply chain is operating efficiently and the Crown team continues its superb marketplace execution as they achieved their 14th consecutive quarter of market share gains during the second quarter."

Constellation Brands expects its adjusted earnings per share for 2014 at $2.80 to $3.10, up from a prior forecast of $2.60 to $2.90.

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

Shares of Constellation stock (NYSE: STZ) were up 3.2 percent midday Thursday at $60.15, after earlier in the day hitting a new 52-week high.

(c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.
 


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