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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (1630)	4/8/2007 9:55:44 PM
From: richardred	Respond to of 7259

No Wining From Constellation: Fool by Numbers By Ryan Fuhrmann, CFA April 5, 2007 On Thursday, April 5, alcoholic beverage producer and marketer Constellation Brands (NYSE: STZ) released fourth-quarter and year-end results for the period ended Feb. 28. Here are the quick and dirty details for the quarter. * Total sales grew 9% over the prior year's fourth quarter, primarily because of strong branded wines' organic growth and the acquisition of Vincor. This was partially offset by a 56% drop in imported beer and a smaller decrease in spirit sales. * Diluted earnings jumped 21%, but Constellation is still struggling overall, thanks to tough business conditions in the U.K. and Australia. * Management expects 2008 reported earnings of $1.21-$1.31, down from this year's $1.38. It's currently calling for free cash flow of $170 million to $190 million, or $0.83-$0.93 per current diluted share. * Constellation carries a three-star rating in the Motley Fool CAPS intelligence database, while rivals Diageo (NYSE: DEO) and Brown-Forman (NYSE: BF-B) (NYSE: BF-A) carry the coveted five-star rating. King of beers Anheuser Busch (NYSE: BUD) and Molson Coors (NYSE: TAP) have three-star ratings. fool.com Update2 -- Constellation Uncorks Good News Joshua Lipton, 04.05.07, 6:05 PM ET For the first time in a while, Constellation Brands reported quarterly results that didn't resemble the dregs at the bottom of one of its bottles, thanks to rising North American demand for wine. But it's still not as optimitic about its future as the analysts who follow it. For the quarter ended Feb. 28, Constellation Brands (nyse: STZ - news - people ) said that earnings, after preferred dividends for the quarter, totaled $70.2 million, or 29 cents per share, up 25.8% from $55.8 million, or 24 cents per share, for the similar period a year ago. Net income climbed to 27 cents per share from 22 cents. The company told investors that, excluding acquisition-related integration costs and other one-time items, it earned 35 cents per share in the quarter. Revenue rose 9%, to $1.42 billion. That was enough to beat Wall Street expectations. Analysts had forecast earnings of 34 cents per share on revenue of $1.1 billion. On Thursday, Constellation shares finished up 3.2%, or 67 cents, to $21.49. That's still significantly below the $29 level at which the stock changed hands around the start of the year. Driving the solid financial performance in the final quarter of the company's 2007 fiscal year was demand from wine-loving North Americans. Constellation said that wine business in North America jumped 31% during the quarter, due to the 2006 acquisition of Vincor International and a 7% growth in the base business. Branded wine net sales for Australia and New Zealand increased 22%. Those strong wine sales helped balance out the less-than-rosy numbers in other areas of the business. Sales of imported beers dropped 56%. Total spirit sales decreased 3%. The company, which has a market capitalization of $4.9 billion, also updated its fiscal 2008 guidance. Constellation told investors that it's looking for earnings in the range of $1.21 to $1.31 a share. On March 1, the Fairport, New York-based company had projected those same earnings , which undershoot Wall Street expectations. The company cited pricing pressures that it blamed on rising supplies of competing Australian wines and a tough market in Britain. For 2008, Wall Street has been expecting to see earnings of $1.36, according to Thomson One Analytics. (See: "Constellation Leaves A Bad Aftertaste.") A chief rival of Constellation is London-based Diageo (nyse: DEO - news - people ), which saw its shares finish down on Thursday by 0.4%, or 30 cents, to $81.95. forbes.com