The seller of Mondavi wine, Svedka vodka and Corona beer also announced a $300 million stock buyback and boosted its forecast for the year by 10 cents a share.

For the three months that ended May 31, Constellation earned $49.1 million, or 22 cents per share. In the same period last year, when it was dragged down by restructuring charges, it earned $6.5 million, or 3 cents per share.

Its revenue slipped less than 1 percent to $787.5 million, as volume fell 1 percent.

Excluding restructuring and other one-time items, Constellation's net income climbed to 38 cents a share, beating Wall Street expectations. Analysts said paying lower taxes than expected boosted Constellation's adjusted net income by 5 cents per share.

Analysts polled by Thomson Reuters, whose estimates typically exclude one-time items, expected the company to earn 35 cents a share. But they expected higher revenue of $798.5 million.

Constellation's shares fell 15 cents, or 1 percent, to $15.47 in afternoon trading. The stock is trading near the middle of its 52-week range of $12.25 to $18.87.

For the 2011 fiscal year, which began March 1, the company now expects to earn $1.63 to $1.78 per share, up from a lackluster forecast of $1.53 to $1.68 it made three months ago. The company said the increase reflects the benefit it expects from accelerating its share buyback program.

Wine sales, which account for the bulk of its revenue, fell 5 percent on a constant-currency basis to $729 million. In North America, they decreased 2 percent to $532 million, but increased volume was more than offset by higher promotion costs.

CEO Rob Sands said Constellation's domestic wine sales in bars and restaurants have fared far better than the industry's overall during the past year. He predicted renewed growth later this year.

"I'd say throughout the year, we'll see it go from negative to flat and then, hopefully, we'll see it start upticking sometime before the end of calendar year 2010," Sands said in a conference call with analysts.

Spirits sales fell 3 percent to $58 million, hit by the loss of revenue from selling its lowest-end liquor brands, even as Svedka vodka sales jumped 40 percent.

Beer sales in its joint venture with Mexican brewer Grupo Modelo SA fell 3 percent to $622 million. The venture's operating income, hurt by lower volume and marketing costs, dropped 14 percent to $109 million.

Constellation Brands has shifted its focus toward higher-price wines and spirits in recent years, but most of its revenue still comes from moderate-price wines. And those sales have fallen as consumers keep a tight rein on spending in bars and restaurants.

Constellation, based in Victor, N.Y., 20 miles southeast of Rochester, offers more than 70 wine brands including Clos du Bois, Woodbridge by Robert Mondavi, Blackstone and Ravenswood.

It also makes Paul Masson brandy and Black Velvet Canadian whiskey and imports beers such as Corona and Negra Modelo from Mexico, Tsingtao from China and St. Pauli Girl from Germany.

After a two-decade acquisition spree, the company sold off some of its lower-price brands. It also has sold off unprofitable brands, consolidated divisions and cut its work force to 6,000 people from 8,200 in 2008.

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