Constellation Brands profit slumps 47%
US-based, ASX-listed beverage company Constellation Brands (CBR) posted a reported $44 million net income for the third quarter 2010, down 47% from the previous corresponding period. Net sales for the company dipped 4% to just under US$1 billion for the quarter, with the slump in reported profit coming from the divesture of its value spirits business and a drop in operating income from international business.
On a comparable basis net income came in at $120 million, down a more modest 9% from the previous corresponding quarter, the company said.
In the US, branded wine sales retreated 3%, while Europe and Australia offset these declines with increases in sales of 12% and 2% respectively. This was primarily due to an increase in sales volumes for cheaper wines.
President and CEO, Rob Sands said that despite the decline in profit, the company’s debt reduction of $336 million was evidence it was on the right economic path.
“The industry and our results continue to be impacted by the difficult economic climate,” Mr Sands said.
“Overall, we remain optimistic for the future and intend to continue to work toward reducing borrowings, improving free cash flow and optimizing return on invested capital.”
Mr Sands said the comparable basis diluted EPS expectation for the full year remained unchanged.
For the year ending 28 February 2010, the company said it was expecting to post earnings of between US79c and US89c per share, up from a $1.40 per share loss last year.
At the close Tuesday, Constellation Brand securities were trading at $1.65 each.
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