US: Constellation doubles Q2 earnings
Constellation Brands said yesterday (30 September) that profit more than doubled in its second quarter.
Constellation's reported net income increased by 127% for the three months to 31 August, to US$80.6m. Reported diluted earnings per share doubled to US$0.69.
Second quarter 2005 and 2004 reported results include restructuring and related charges and net unusual costs of US$1.4m after tax, or US$0.02 per share, and US$30.8m after tax, or US$0.30 per share, respectively, the company said.
Net income, on a comparable basis excluding the restructuring and related charges and net unusual costs, increased by 24%, to US$82m, and comparable diluted earnings per share increased by 11% to US$0.71. Diluted earnings per share growth was impacted by additional shares outstanding, primarily as a result of the company's equity offerings in July 2003, the proceeds of which were used to pay down debt incurred to partially finance the Hardy acquisition.
The company reported record net sales for the three-month period, topping US$1 bln for the first time in any quarter since the company was founded in 1945. Net sales increased by 14%, driven by growth across the company's businesses of imported beers, spirits, branded wine and its UK wholesale business. Currency contributed 5% of the increase.
In a statement, Richard Sands, Constellation Brands chairman and chief executive officer, said: "We're pleased with the vibrancy of our beverage alcohol business' organic growth, and we're particularly happy about the performance of brands receiving incremental marketing investment in fiscal 2005, including Alice White, Ravenswood, Hardys and Blackstone wines, as well as our strong Corona beer results.
"14% growth for our beers and spirits segment was driven by continued strong consumer demand for our entire Mexican beer portfolio. Our wines segment also grew 14%, with approximately half of that growth coming from additional distribution and sales of the brands we're supporting with incremental dollars. We're committed to growing our brands."
The company said it expects to earn between 80 cents and 84 cents per share in the third quarter, or 82 cents to 86 cents a share excluding items. For the year, Constellation forecast earnings of US$2.50 to US$2.55 per share, or US$2.62 to US$2.67 per share excluding items.
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