Constellation Brands (STZ) Jumps Over 5% On Q2 Earnings Beat

Constellation Brands Inc. (NYSE:STZ) , a leading international producer and marketer of beverage alcohol brands, released second-quarter fiscal 2018 results, wherein adjusted earnings of $2.47 a share surpassed the Zacks Consensus Estimate of $2.16. Moreover, the bottom line surged 40% from the year-ago quarter.

Backed by solid growth at its beer business, Constellation Brands raised its fiscal 2018 adjusted earnings forecast to $8.25-$8.40 per share from the previous guidance of $7.90-$8.10. Also, the company raised its GAAP earnings estimate to $7.90–$8.05 per share, compared with $7.55–$7.75 anticipated earlier.

Earnings Estimate Revision: The Zacks Consensus Estimate for fiscal 2018 has increased by a penny in the last 30 days. Constellation Brands’ performance in the trailing four quarters (excluding the quarter under review) gives a positive picture. The company has outperformed the Zacks Consensus Estimate by an average of 11.7% in the trailing four quarters.

Revenues: Constellation Brands generated net sales of $2,084.5 million that increased 3.1% year over year and also came above the Zacks Consensus Estimate of $2,058 million. The upside was driven by organic sales growth of 8% and benefits from recent acquisitions.

The company reiterated its sales targets for fiscal 2018. It continues to anticipate beer business sales to grow 9%–11% in fiscal 2018, while sales for the wine and spirits business is expected to decline 4%–6%. These estimates include the expected impact from the divestiture of the Canadian wine business and the benefits from High West, Charles Smith and Prisoner acquisitions.

Key Events: During the reported quarter, Constellation Brands has acquired Funky Buddha Brewery, a leading craft brewery in Florida, in order to strengthen its position in the high-end beer segment in the U.S. The acquired brewery will form part of Constellation Brands’ Craft & Specialty Beer group in the beer division. However, the terms of the deal remained under covers.

Zacks Rank: Currently, Constellation Brands carries a Zacks Rank #2 (Buy), which is subject to change following the earnings announcement. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stock Movement: Constellation Brands’ shares jumped 5.4% in the pre-market trading hours following the stellar second-quarter results and favorable fiscal 2018 view.

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

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