Constellation Brands, Inc. Shares Surge on Results Sweetened by Grupo Modelo Deal
After Constellation Brandsreported strong first-quarter FY 2015 results in Wednesday's early hours, shares rose as much as 7.5% in pre-market trading.
The adult-beverage producer, importer, and marketer reported adjusted earnings of $1.07 per share on $1.5 billion in net sales. That's up from $0.38 per share and $673 million, respectively, in the year-ago quarter. Analysts would have settled for $0.93 per share and $1.4 billion, respectively. The company also staked out full-year earnings guidance between the $4.10 and $4.25 marks per share. These numbers also look strong in comparison to Wall Street's current $4.12 estimate.
The sales surge rested on last summer's $5.3 billion acquisition of the U.S. rights for Grupo Modelo beer brands from Anheuser-Busch InBev. AB InBev spun the American rights and assets off to Constellation in order to satisfy regulatory demands on its larger $20 billion deal for worldwide control of Mexico's largest brewer.
The deal added $868 million to Constellation's first-quarter sales, and $288 million to the quarter's operating income. Beer shipments increased by 10.5% year over year, driving a 14% increase in net sales for these operations. Excluding these Modelo-based gains, Constellation's remaining portfolio saw sales decline 2.3% year over year, while increasing wine and spirits operating profits by 12%.
"We posted a great quarter reflecting outstanding results for our beer business as well as wine and spirits performance that was generally in-line with our expectations," said Constellation CEO Rob Sands in a prepared statement. "Within our beer business, we continue to capitalize on our industry-leading performance and excellent retail execution across our entire Mexican beer portfolio."
The article Constellation Brands, Inc. Shares Surge on Results Sweetened by Grupo Modelo Deal originally appeared on Fool.com.Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.