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Constellation Profit Jumps 12% on Mondavi Wine Sales

January 06, 2006|From Bloomberg News

Constellation Brands Inc. on Thursday said that its fiscal third-quarter profit rose 12%, reflecting the company's December 2004 acquisition of Robert Mondavi Corp.

The world's largest winemaker, Constellation forecast fiscal fourth-quarter earnings below analysts' estimates, sending its shares down 4.5%.

Net income in the period ended Nov. 30 was $109 million, or 46 cents a share, up from $96.9 million, or 42 cents, a year earlier.

Sales rose 15% to $1.57 billion. Excluding sales of Mondavi wine and other recently acquired brands, as well as the effects of changes in currency rates, sales were up 6%.

Total wine sales jumped 19% in the period. Beer and liquor sales also rose, helped by the 99 line of flavored Schnapps and imported brews such as Negra Modelo from Mexico and Tsingtao from China.

"Constellation is on the right side of beer trends and wine trends with these great brands that are outpacing the rest of the category," said Matthew Kaufler, a money manager at Clover Capital Management Inc.

Shares of Constellation fell to $25.05, down $1.17, their biggest drop in three months. They climbed 13% last year.

The company said profit excluding acquisition-related costs, restructuring expenses and Mondavi grape-contract obligations was 52 cents a share, compared with 50 cents forecast on average by analysts.

Constellation, based in Fairport, N.Y., forecast fiscal fourth-quarter profit of 34 cents to 37 cents a share. Analysts had forecast earnings of 38 cents.

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