Constellation Beer Sales Drive Earnings Growth

Constellation Brands Inc. on Wednesday said strong beer sales drove revenue and profit growth for the quarter and lead the alcohol distributor to increase its profit forecast for the year.

The second-quarter results came in above Wall Street expectations, and shares rose 3.1% in premarket trading.

The company now expects to bring in adjusted per-share earnings for the year of between $6.30 and $6.45, compared with its previous estimate of between $6.05 and $6.35. Analysts polled by Thomson Reuters had expected adjusted earnings per share of $6.29.

Constellation has continued to focus on premium wines and beer in the U.S. The Wall Street Journal reported last week that Constellation put its Canadian wine business for sale, in a move that could fetch more than $1 billion.

This week, Constellation acquired craft whiskey maker High West Distillery in a roughly $160 million deal that expands the alcohol company's business into the fast-growing bourbon and rye categories. Over the past year, Constellation also acquired luxury winemaker Prisoner Wine Co. and craft-beer brewer Ballast Point.

In the latest quarter, Constellation's organic beer sales rose 15% from volume growth and higher prices. Constellation became the third-largest beer company by volume in the U.S. in 2013 after acquiring rights to Corona and Modelo from Anheuser-Busch InBev NV.

Wine and spirits posted 8% organic revenue growth, helped by volume growth and favorable product-sales mix.

The company said it shipped 8.4 million more 24-pack beer equivalents in its latest quarter than the same quarter a year ago.

For the quarter ended in August, Constellation reported a profit of $358.9 million, or $1.75 a share, up from $302.4 million, or $1.49 a share, a year earlier. Adjusted earnings were $1.77 a share. Analysts had expected earnings of $1.65 a share.

Net sales grew 17% to $2.02 billion.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

October 05, 2016 09:15 ET (13:15 GMT)

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