NEW YORK (Reuters) - Wine and spirits maker Constellation Brands Inc <STZ.N> reported a better-than-expected fourth-quarter operating profit on Thursday, helped by acquisitions and the weak dollar, and forecast earnings for the current year that topped Wall Street's view.
By Martinne Geller
NEW YORK (Reuters) - Wine and spirits maker Constellation Brands Inc <STZ.N> reported a better-than-expected fourth-quarter operating profit on Thursday, helped by acquisitions and the weak dollar, and forecast earnings for the current year that topped Wall Street's view.
The owner of wine brands Robert Mondavi, Ravenswood and Vendange, whose shares jumped more than 5 percent in early trading, posted a net loss of $831.9 million, or $3.90 per share, in the quarter that ended February 29, compared with a net profit of $70.2 million, or 29 cents per share, a year earlier.
But excluding items such as $888 million of acquisition-related costs, restructuring and related charges and unusual items, Constellation earned 34 cents per share.
!ADVERTISEMENT!Analysts on average were expecting 25 cents per share, according to Reuters Estimates.
Constellation, which also owns 99 Schnapps and Black Velvet Canadian Whisky, also had a 25 percent higher interest expense in the quarter, mostly due to recent acquisitions and $500 million of share buybacks.
Constellation changed how it reports sales that come from two joint ventures -- Crown Imports, which brings Corona beer into the United States, and Matthew Clark, a U.K.-based drinks wholesaler. This change led quarterly net sales to fall 23 percent to $884.4 million.
But that pain was partially offset by the weak dollar, which boosted the value of overseas sales when converted to U.S. currency, and the recent acquisitions of Svedka Vodka and the wine business of Fortune Brands Inc <FO.N>.
About 69 percent of Constellation's quarterly sales came from North America, about 20 percent from Europe and the remaining 11 percent from Australia and New Zealand.
Excluding brands like Clos du Bois, Geyser Peak and Wild Horse, which Constellation bought from Fortune, branded wine sales fell 2 percent overall, as a 5 percent decline in North America was partially offset by increases in Europe and the Australia/New Zealand region of 4 percent and 8 percent, respectively.
Earlier in the fiscal year, U.S. wine distributors reduced the amount of inventory they carried, which impacted the timing of Constellation's sales and hurt growth in the fourth quarter, the company said.
Excluding the Svedka acquisition, spirits sales rose 10 percent.
For fiscal 2009, which will end next February, Constellation said it expects to earn $1.68 to $1.76 per share, excluding items, up from $1.44 per share in fiscal 2008.
That forecast assumes reported net sales increasing in a mid-single-digit percentage range, interest expense of $340 million to $350 million and free cash flow of $310 million to $340 million, the company said.
Analysts on average are expecting $1.67 per share, excluding items, according to Reuters Estimates.
Shares of Constellation were up $1, or 5.3 percent, to $19.72 on the New York Stock Exchange.
(Reporting by Martinne Geller, editing by Mark Porter and Maureen Bavdek)
