Shares of Constellation Brands Inc. were up nearly 6 percent Thursday after the Victor firm posted a second-quarter profit and beat Street expectations.
Shares of Constellation (NYSE: STZ) were trading midday at $16, up from Wednesday’s close of $15.15.
The company credited global cost-reduction efforts and a reduction in impairment charges for the profit.
Constellation reported net income for the quarter ended Aug. 31 of $99.7 million, or 45 cents a share. This compares with a loss of nearly $23 million, or 11 cents a diluted share, a year ago.
For the second quarter, pre-tax restructuring charges, acquisition-related integration costs and unusual items totaled $29 million, compared with $129 million for the prior year second quarter.
The company logged net sales, after excise taxes, of $876.8 million, down from $956.5 million a year ago. Operating income in the wines segment increased $16 million compared with last year, officials said.
“Our performance in the second quarter demonstrates that we are on track to achieve our full-year goals,” said Robert Sands, president and CEO. “We are focused on driving organic growth, building must-have brands that return the greatest profits and creating efficiencies for long-term sustainable growth. Our initiative to consolidate distribution in the U.S. is nearly complete and we anticipate that this effort will be a major catalyst for future organic brand growth.”
Sales fell 41 percent in Constellation’s spirits segment to $64.9 million, largely due to the sale of its value spirits operations to Sazerac Co. for $274 million.
Branded wine sales were down 4 percent to $752.4 million and sales from the company’s Crown Imports joint venture, which includes Corona, dropped 5 percent to $693 million.
The company reported it decreased debt by more than $155 million during the quarter and by $270 million year-to-date.
“We are pleased with the progress made in our global cost reduction efforts and the continuing drive to increase sustainable free cash flow and pay down debt,” Chief Financial Officer Bob Ryder said. “Our deleveraging efforts are progressing well as debt decreased by more than $155 million during the second quarter and more than $1 billion since the beginning of fiscal 2009.”
The company reaffirmed its outlook, saying it still expects to earn $1.60 to $1.70 a share in fiscal 2010, compared with a profit of $1.60 a share in fiscal 2009.
Constellation ranked 13th on the most recent Rochester Business Journal list of manufacturers with 634 local employees.
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