UPDATE 3-Constellation Brands beats Street but stock falls
(Adds stock activity, comments from conference call, analyst; changes headline)
NEW YORK, Oct 2 (Reuters) - Alcoholic drinks company Constellation Brands Inc (STZ.N) posted a quarterly profit excluding items that beat Wall Street estimates by a penny per share and maintained its full-year outlook but cut its sales forecast for a Mexican beer joint venture.
Shares fell 6 percent.
The company said sales by volume for fiscal 2009 ending in February for its Crown Imports joint venture, which sells Grupo Modelo (GMODELOC.MX) beers in the United States, should be flat to up slightly. Its prior estimate had called for sales growth in the mid-single digit range.
Sales of the Crown beers rose only 1 percent in the quarter ended Aug. 31, as weak sales of Corona Extra partially offset stronger sales of brands including Negra Modelo and Pacifico.
The company said sales of Corona, the top-selling imported beer in the U.S., were weak as its stronghold areas of California, Florida and Arizona have been most hurt by the housing collapse.
The recent launch of Anheuser-Busch Cos Inc's (BUD.N) Bud Light Lime may have also cut into Corona sales, Constellation said.
Constellation said it sees trends improving in the coming months as comparisons ease.
RESULTS "A DISAPPOINTMENT?"
Constellation, the world's largest wine producer with brands including Robert Mondavi and Ravenswood, reported a net loss for its fiscal second quarter of $22.7 million, or 11 cents per share, compared with a net profit of $72.1 million, or 33 cents per share, a year before.
But excluding restructuring charges, acquisition-related costs, inventory write-downs from selling some Australian assets and other items, Constellation earned a profit of 45 cents per share. Analysts on average were expecting 44 cents, according to Reuters Estimates.
Still, the underlying results were "a disappointment," according to Stifel Nicolaus analyst Mark Swartzberg. He said the quarter's 29.1 tax rate was much lower than the company had forecast and therefore added 5 cents per share to earnings.
In addition, he said "disappointing beer and selected wine results (mostly international) caused comparable earnings before interest and tax to be nearly 10 percent below our estimate."
Net sales rose 7 percent to $956.5 million, with branded wine sales growing 6 percent and spirits sales growing 4 percent.
Excluding the recent acquisitions of premium wine brands including Clos du Bois and Wild Horse, the company's branded wine business rose 4 percent. In North America, wine sales rose 7 percent from the year-ago period, when the company sold much less wine in order to reduce distributors' inventory levels. Continued...
