ROCHESTER, N.Y. (AP) — Wine and spirits maker Constellation Brands Inc. said Thursday its second-quarter profit jumped 78 percent on improved wine and spirits sales in North America, price increases and lower cost-cutting charges.
The results beat Wall Street estimates and company raised its full-year guidance.
Its shares rose $1.27, or 6.8 percent, to $19.99 in premarket trading.
Constellation sells moderately priced wines and spirits such as Robert Mondavi, Clos du Bois and Ravenswood, plus Svedka vodka and Black Velvet Canadian whiskey. It also imports beers through a joint venture, including Corona Extra, Tsingtao and St. Pauli Girl.
The Victor, N.Y.-based company said its net income climbed to $162.7 million, or 76 cents per share, in the June-to-August quarter, up from $91.3 million, or 43 cents, a year earlier.
Excluding $4 million in restructuring and other one-time items, it earned 77 cents per share. Wall Street expected 65 cents per share, according to a survey by FactSet. A year ago, it recorded $17 million in one-time charges.
Its revenue fell 20 percent to $690.2 million largely because it sold the bulk of its Australian and British wine business in January.
Its wine and spirits sales in North America rose 5 percent to $690.2 million.
After a sharp falloff in wine sales in 2009, especially in bars and restaurants, industry volumes have been rebounding this year as Americans take advantage of more discounts to trade up to higher-priced brands.
In cost-cutting mode for five years, Constellation has refocused on solidifying its supremacy in higher-margin, “premium-category” wines priced from $5 to $20 a bottle. It has slashed its payroll from 9,400 to 4,300.
The company also raised its full-year guidance by 10 cents to a range of $1.92 to $2.02 per share. Analysts expected $1.97 per share.
Constellation lost its eight-year status as the world’s No. 1 winemaker when it offloaded 80 percent of a once-promising Australian wine business that had gone awry.
It dropped back to No. 2 in the vintner-by-volume rankings behind longtime leader E. & J. Gallo of Modesto, Calif. But it remains the world’s biggest premium-category winemaker with an estimated 17 percent share of that segment in the United States.