Constellation Brands Profit Beats Expectations
On Thursday, Constellation Brands Inc announced its first dividend to be paid in cash since 1973 when it went public, as the maker of alcoholic beverages said its Mexican beer division continued driving growth during the recently ended quarter.
Constellation had been saying recently that it had looked into returning its shareholders cash as it lowered its debt levels. The company, based in Victor, New York said a cash dividend would be paid of 31 cents per shares for Class A stock and for 28 cents a share for Class B stock. The dividend is scheduled for May.
Constellation’s Modelo Especial and Corona Extra brands have become two popular beers across the U.S. of recent. Larger competitors such as MillerCoors and Anheuser-Busch InBev have struggled with volumes that are declining in the past few years.
For the fourth quarter, Constellation’s sales of beer were up 11%. Net sales of spirits and wines were up 2% for the same period though a decline in volume was experienced by that unit.
To stay abreast of the surging sales of beer, Constellation said it was planning to spend over $1 billion to expand its Nava, Mexico brewery. On Thursday, Constellation said the project was progressing within budget and on time. The company announced it was targeting costs of between $950 million and $1.05 billion on beer projects during its fiscal year that just began.
Overall, the company’s fourth quarter saw a profit of $215 million equal to $1.06 per share in comparison to 79 cents per share or profits of $157 million during the same period one year ago. Excluding special items, earnings per share for the company ended the quarter at $1.03 per share.
Net sales were up just over 5% to end the quarter at $1.36 billion. Wall Street projected 94 cents per share of profit and revenues of $1.36 billion.
For its fiscal 2016 year ending in February of 2016, Constellation forecast earnings per share of between $4.70 and $4.90, which is in line with Wall Street’s $4.85 per share.
Constellation said it was targeting sales growth in the high single digits for its beer sector and the low to middle single digits for spirits and wine.
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