Constellation Brands Inc. (NYSE: STZ) reported Thursday that the winemaker’s third-quarter profit dropped 47 percent due to restructuring-related costs and weaker U.S. wine sales, according to Associated Press.
The company, which is the world's largest winemaker, said its branded wine sales dropped 3 percent in the North American market, which is a key demographic for the company.
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Constellation Brands said it earned $44.1 million, or 20 cents a share, in the quarter ended Nov. 30. That compared with a profit of $83.5 million, or 38 cents a share, a year earlier.
Sales fell 4 percent to $987.7 million from $1.03 billion.
Excluding one-time costs, Constellation said it earned 54 cents a share, which was 2 cents a share above the average Wall Street estimates. Restructuring charges, acquisition-related and other unusual items totaled $81 million, compared with $21 million in last year's third quarter.
Analysts surveyed by Thomson Reuters also expected lower net sales of $905.3 billion. The company maintained its forecast for 2010 adjusted earnings of $1.60 to $1.70 per share. Analysts expect full-year profit of $1.65 a share.
Overall branded wine sales, which account for the bulk of its sales, rose 2 percent to $868 million.
The 3 percent revenue drop in North America was offset by a 12 percent jump in Europe and 2 percent increase in Australia and New Zealand. The sales increase in Europe was primarily due to higher volumes of lower priced products.
Beer sales in its Crown Imports wholesale business joint venture with Mexican brewer Grupo Modelo SA fell 10 percent to $499 million. Sales of spirits fell 2 percent.
The company sells about 70 wine brands and liquors such as Svedka vodka, Paul Masson brandy and Black Velvet Canadian whiskey. It also imports beers such as Corona and Negra Modelo from Mexico, Tsingtao from China and St. Pauli Girl from Germany.
Constellation Brands bought Australia’s BRL Hardy Ltd. for $1.1 billion in cash and stock in a 2003 deal that made it the world's largest wine business. It jumped further ahead of longtime wine leader E.& J. Gallo Winery when it bought Robert Mondavi Corp. for $1.3 billion.
Constellation shares fell 35 cents, or 2.2 percent, to $15.78 in morning trading.
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