(Bloomberg) — Constellation Brands Inc. rose the most in six months after posting profit and sales last quarter that topped analysts’ estimates and raising its full year earnings forecast.
Comparable earnings of $2.14 a share in the third quarter was well above the $1.84 average of estimates, amid growth from its beer brands Modelo Especial and Corona. Comparable profit for the full year will be $9.45 to $9.55 a share, up from a previous forecast for as much as $9.20.
Constellation has been leaning heavily on its beer business, where it’s aggressively advertising the Modelo Mexican import brand to boost sales. The brewer also is creating new items under the Corona brand in the popular hard seltzer category, with a 90-calorie drink planned to launch this year.Constellation has been working on fixing its portfolio in recent years, buying a stake in the world’s most valuable cannabis company, Canopy Growth Corp., while selling part of its wine and spirits unit to E&J Gallo Winery. Last month, Constellation said it was divesting Ballast Point, a craft beer it bought for about $1 billion just four years ago.Since investing in Canopy, Constellation Chief Executive Officer Bill Newlands has said he’s not happy with its performance. On Wednesday, the company said it recognized a $534 million decrease in the fair value of the investment in the third quarter. In December, Canopy named Constellation executive David Klein as CEO, raising the odds that the beer maker will buy Canopy outright.
Constellation shares rose as much as 4.3% to $191.50 in New York Wednesday, the biggest intraday gain since June. The stock gained 18% last year, trailing the S&P 500 Index.For the company release, click here.
To contact the reporter on this story: Leslie Patton in Chicago at [email protected]
To contact the editors responsible for this story: Sally Bakewell at [email protected], Lisa Wolfson, Cécile Daurat
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