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US: Constellation affirms 2008 outlook, buys back shares

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Constellation Brands has reaffirmed its profit expectations for 2008, while at the same time confirmed a share buyback programme.

The US-based company said yesterday (7 May) that it expects its earnings for the year to the end of February 2008 - adjusted for one-time items - to come in between US$1.30 and $1.40 per share. On a reported basis, Constellation's EPS outlook is between $1.16 and $1.26.

Organic net sales for the year are expected to record low single-digit growth, although the impact of reporting its Crown Imports joint-venture and the joint-venture for the Matthew Clark wholesale business under the equity method should see reported net sales decrease by 30% to 32% on the corresponding period a year earlier.

Constellation also said that it has entered into an accelerated share repurchase transaction with Citibank to repurchase at least 16.9m shares of its Class A common stock for $421.1m. The transaction will go through today.

"We believe this accelerated share repurchase transaction demonstrates our strong commitment to maximising shareholder value and also aligns well with our stated objective of harvesting opportunities that enhance our long-term value creation goals," said Constellation's chairman and CEO Richard Sands.


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