Monday, March 28, 2011

Constellation Brands (NYSE: STZ): Q4 Earnings Preview 2011

Constellation Brands Inc. (NYSE: STZ) is scheduled to release its fourth-quarter financial results before the market open on Thursday, April 7, 2011. Analysts, on average, expect the company to report earnings of $0.26 per share on revenue of $731.54 million. In the year ago quarter, the company reported earnings of $0.27 per share on revenue of $708.70 million.

Constellation Brands, Inc., together with its subsidiaries, engages in the production and marketing of beverage alcohol brands in wine, spirits, and imported beer categories. Constellation's brand portfolio includes Robert Mondavi, Hardys, Clos du Bois, Blackstone, Arbor Mist, Estancia, Ravenswood, Jackson-Triggs, Kim Crawford, Corona Extra, Black Velvet Canadian Whisky and SVEDKA Vodka. Constellation Brands generates a bulk of its revenue from wine, most of it moderately priced.

In the preceding fiscal third quarter, the Victor, New York-based company's net income was $139.3 million or $0.65 per share, compared with $44.1 million or $0.20 per share last year. Comparable net income rose to $141.5 million from $120.4 million in the prior-year quarter. Comparable earnings per share were $0.66, up from $0.54 in the same quarter last year. Revenue dropped 2% to $966.4 million from $987.7 million in the comparable period last year Analysts, on average, expect the company to report earnings of $0.62 per share on revenue of $992.84 million.

At its last earnings call in January, raised its fiscal 2011 earnings guidance. Constellation said that it now expects fiscal 2011 GAAP earnings per share in the range of $1.53 - $1.58. Earlier, on a reported basis, the company's earnings per share were projected to be between $1.36 and $1.51. The company also forecast comparable earnings per share in the range of $1.80 - $1.85, up from $1.63 - $1.78 estimated previously. The company also increased its annual target for free cash flow by $100 million, to a range of $475 million to $525 million. Constellation now expects a full-year tax rate of 31 percent, down from the 35 percent it previously forecast.

For its 2012 fiscal year, Chief Financial Officer Bob Ryder said the company expects earnings before interest, taxes and one-time items to be slightly above the 2011 forecast, while the tax rate will not top the expected 2011 rate.

The beverages industry is benefiting from a return towards pre-recession spirits consumption. One area targeted by the sector due to saturated Western markets has been the emerging economy consumers of Asia. 

Constellation Brands has benefited from increased sales volumes and depletion. In recent years, the company has shifted focus toward higher-priced wines and spirits, selling off some of its lower-price brands after a two-decade acquisition spree. During the quarter, Constellation completed sale of some of its Australian and British wine business to help streamline itself and improve profitability.

The company's stock currently trades at a forward P/E (fye Feb 28, 2012) of 10.24 and PEG Ratio (5 yr expected) of 1.05. In terms of stock performance, Constellation shares have gained nearly 18% over the past year.

Full Disclosure: None.
Related Posts with Thumbnails

Wikinvest Wire