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Bottles of Constellation Brands Inc. Wild Horse Cabernet Sauvignon wine sit on display for sale inside a BevMo Holdings LLC store in Walnut Creek, California, Jan. 3, 2018.
But Constellation’s push into cannabis has yet to pay off. The Victor, New York-based company said that it wrote down the value of its Canopy stake by $164 million in the third quarter. It had financed the deal with debt, and the interest expenses are expected to shave 25 cents off its per-share earnings for the year, according to the company’s estimates.
Constellation Brands said it expects to earn between $9.20 and $9.30 per share for the fiscal 2019 year, on an adjusted basis, missing analysts’ expectations of $9.43 per share. Last quarter, it estimated earnings per share of $9.60 to $9.75 for the fiscal year. That outlook excluded any impact from the investment.
“While we remain bullish on STZ’s positioning in beer and its [long-term] opportunity especially with its investment in Canopy Growth (NYSE:CGC), we believe it is urgent that STZ address its low end wine business,” Wells Fargo analyst Bonnie Herzog said in a note about Constellation’s earnings.
Here’s what the company reported for its fiscal third quarter compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.37, adjusted, vs. $2.06 expected
- Revenue: $1.97 billion vs. $1.91 billion expected
Constellation said it expects weakness in its wine and spirits business next quarter, with both sales and operating income expected to fall by low-single digits.
Wine and spirits sales were nearly flat in the latest quarter, up only 0.4 percent from the previous year. The company reported sales of $762.8 million for the division, which includes Svedka vodka.
The company’s stock, which has a market value of $32.7 billion, struggled in 2018, with shares ending the year down 30 percent.
from Viral News Reports http://bit.ly/2QzVfvd
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