Constellation Brands (STZ) Q2 Earnings Beat, Ups FY16 View

Constellation Brands Inc. STZ, a leading international producer and marketer of beverage alcohol brands, released solid second-quarter fiscal 2016 results, wherein adjusted earnings of $1.56 a share surpassed the Zacks Consensus Estimate of $1.31. Moreover, the bottom line rose nearly 41% from $1.03 a share earned in the year-ago quarter.

Based on the sustained strength of its beer business, Constellation Brands raised its fiscal 2016 forecast, projecting adjusted earnings per share of $5.00–$5.20 and GAAP earnings of $4.73–$4.93.

Earnings Estimate Revision: The Zacks Consensus fiscal 2016 Estimate portrays an upside in the last 60 days. Constellation Brands’ performance in the trailing four quarters (including the quarter under review) gives a positive picture. The company outperformed the Zacks Consensus Estimate by an average of nearly 10% in the trailing four quarters.

Revenues: Constellation Brands generated net sales of $1,733.4 million that increased 8% year over year and outdid the Zacks Consensus Estimate of $1,727 million primarily due to higher volumes for the beer business and continued gains in the Wine and spirits business. Further, the company benefited from improved depletion trends during the quarter.

Key Events: Constellation Brands is on track with its expansion plans for the glass plant and Nava brewery. During the quarter, the company successfully completed the acquisition and integration of Meiomi into its Wine business. The company is now on track with the expansion of its distribution channels to drive incremental growth. Constellation Brands also declared a quarterly cash dividend of 31 cents per share, payable on Nov 24.

Zacks Rank: Currently, Constellation Brands carries a Zacks Rank #3 (Hold) which is subject to change following the earnings announcement.

Check back later for our full write up on Constellation Brands’ earnings report!

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