Constellation's profit falls 63 pct on units sale
NEW YORK—Constellation Brands said Thursday that its fiscal fourth-quarter net income fell 63 percent as a result of the divesture of its Australian and U.K. wine business. But the company said a new product mix helped boost its North America sales.
A weak outlook for 2013 sent Constellation's stock down sharply. Shares of Constellation fell $2.19, or almost 9 percent, at $24.69 in premarket trading.
For the three months ended Feb. 29, the Victor, N.Y.-based wine and spirits company said it earned $103 million, or 51 cents per share. That compares with a profit of $279.8 million, or $1.32 per share, in the year-ago period.
Not including one-time items, the company said it earned 69 cents per share. By that measure, analysts on average expected a profit of 39 cents per share.
For the full fiscal 2012, the company reported a net income of $2.13 per share, down from $2.62 per share the previous year.
Net sales for the quarter were $628.1 million, down 12 percent from the previous quarter, due primarily to the divestiture of the Australian and U.K. wine business. Constellation has been pruning methodically for five years to focus on higher-margin wines and revive profits in a choppy economy. The company last year lost its eight-year status as the world's No. 1 winemaker when it offloaded 80 percent of a once-promising Australian wine business.
But Constellation also noted that a favorable product mix and volume growth helped boost its North American net sales on a constant currency basis by 5 percent
Constellation also said it authorized the repurchase of up to $1 billion of the company's common stock. That's in addition to the current $500 million share repurchase authorization.
For fiscal 2013, Constellation expects to report a lower net income of $1.89 to $1.99 as a result of stock repurchases and interest expenses. Analysts had expected $2.24 per share.