UPDATE 1-Constellation Brands beats estimates as beer sales rise
(Adds forecast, details)
July 2 (Reuters) - Constellation Brands Inc reported higher-than-expected quarterly revenue and profit as its advertising campaigns boosted sales of Corona and Modelo beer brands in the summer, sending its shares up 7 percent premarket.
The company, which also makes Svedka Vodka and Robert Mondavi wine, raised its adjusted profit forecast to $4.10-$4.25 per share for the year ending Feb. 28, 2015. It had earlier expected $3.95-$4.15.
Constellation, which sells Corona beer in the United States, said it expects net sales to grow about 10 percent and operating income to increase 25-30 percent in its beer business, which contributed half of its revenue last year.
The company said in April it expected net beer sales to grow in mid-to-high single digits and operating income to grow in the low-to-mid 20s in percentage terms.
Constellation brands became the largest supplier of wine, beer and other alcoholic drinks in the United States after gaining full control of Crown Imports LLC, its joint venture with Grupo Modelo SAB de CV, last year.
The company said beer sales rose 14 percent to $867.7 million in the first quarter ended May 31, driven by its '120 Days of Summer' advertising campaign and sales during Cinco de Mayo and Memorial Day holidays.
Constellation has been concentrating on selling more beer through aggressive marketing as sales of its wines and spirits stagnate. Selling and other expenses rose almost 50 percent to $277.9 million in the quarter.
Beer and malt beverage sales in the summer could top $11 billion this year, according to the Beer Institute. (bit.ly/1z7kHeS)
Constellation's net income rose to $206.7 million, or $1.03 per share, in the first quarter, from $52.9 million, or 27 cents per share, a year earlier.
Excluding items, the company earned $1.07 per share.
Net sales more than doubled to $1.53 billion.
Analysts on average had expected a profit of 93 cents per share and $1.43 billion in net sales, according to Thomson Reuters I/B/E/S.
The company's shares were trading at $94.45 on Wednesday. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Joyjeet Das and Don Sebastian)