Constellation Brands Inc. STZ, a leading international producer and marketer of beverage alcohol brands, released solid third-quarter fiscal 2017 results, wherein adjusted earnings of $1.96 a share surpassed the Zacks Consensus Estimate of $1.72. Moreover, the bottom line rose nearly 38% from $1.42 a share earned in the year-ago quarter.
Constellation Brands raised its fiscal 2017 earnings forecast, projecting adjusted earnings per share of $6.55–$6.65 and GAAP earnings of $7.55–$7.65, based on lower tax rate expectations.
Earnings Estimate Revision: The Zacks Consensus fiscal 2017 Estimate portrays an upside in the last 30 days. Constellation Brands’ performance in the trailing four quarters (including the quarter under review) gives a positive picture. The company outperformed the Zacks Consensus Estimate by an average of 6.7% in the trailing four quarters.
CONSTELLATN BRD Price and EPS Surprise
CONSTELLATN BRD Price and EPS Surprise | CONSTELLATN BRD Quote
Revenues: Constellation Brands generated net sales of $1,811 million that increased 10% year over year and outdid the Zacks Consensus Estimate of $1,784 million primarily due to higher organic sales as well as benefits from the acquisitions. On a constant-currency basis, organic sales grew 7%.
Key Events: Constellation Brands successfully completed the sale of its Canadian Wine business to Ontario Teachers' Pension Plan, which is Canada’s largest single-profession pension plan for C$1.03 billion. The sale forms a part of the company’s strategy to focus on premium, margin accretive, growth opportunities.
The company bought the Obregon Brewery from Grupo Modelo, a subsidiary of Anheuser-Busch for $600 million. The acquisition will enable Constellation Brands to capture immediate functional brewery capacity that will help serve its high-end Mexican beer portfolio, alongside providing it with the flexibility for future innovation strategies. Further, the company expanded its premium wine and spirits portfolio with the acquisitions of Charles Smith Wines and High West Distillery. The company also repurchased about 2.4 million shares for $367 million during the quarter.
Zacks Rank: Currently, Constellation Brands carries a Zacks Rank #2 (Buy) which is subject to change following the earnings announcement. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stock Movement: Constellation Brands’ shares jumped nearly 1.1% during pre-market trading hours following the earnings release. Investors developed a positive sentiment following the company’s better-than-expected results and raised FY17 view.
Check back later for our full write up on Constellation Brands’ earnings report!
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