UPDATE 2-Constellation profit tops views, driven by Modelo purchase
By Atossa Araxia Abrahamian
Oct 3 (Reuters) - Constellation Brands Inc, the world's biggest branded wine maker, reported higher quarterly earnings on Thursday thanks to the recent acquisition of Grupo Modelo's U.S. beer business, beating Wall Street's estimates and sending the company's shares up.
Constellation, with labels such as Robert Mondavi and Ravenswood, also raised its full-year outlook, crediting lower-than-expected taxes.
"The acquisition has been a real game changer for the company and they now have outright control of Corona in U.S. as well as its production capabilities and the Mexican brewery that came with the deal," said Tom Mullarkey, an analyst at Morningstar.
"In a market where a lot of mainstream beers like Miller are struggling to break even or declining in volume in the U.S., (Constellation's) beer did good - volume was up 1 percent and sales were up 3.3 percent," Mullarkey said.
For the full year, Constellation now expects earnings of $2.80 to $3.10 per share, excluding items, up from a prior forecast of $2.60 to $2.90.
Net income for the fiscal second quarter ended Aug. 31 was $1.52 billion, or $7.74 per share, compared with $124.6 million, or 71 cents per share, a year earlier, prior to the acquisition.
Excluding one-time items, earnings were 96 cents per share. Analysts were expecting earnings of 88 cents per share, according to Thomson Reuters I/B/E/S.
Sales rose to $1.46 billion from $698.5 million a year earlier, driven by the company's new ownership of Crown Imports, which distributes Modelo and other beers in the United States, including Corona Extra, the No. 1 imported beer.
Shares of Constellation rose 1.3 percent to $58.98.
Constellation Brands completed its acquisition of Grupo Modelo's U.S. beer business from Anheuser-Busch InBev for approximately $4.75 billion on June 7.