Alcoholic beverage maker Constellation Brands, Inc. (STZ,CBR.AX,STZ-B) on Thursday reported a 37 percent increase in profit for the fourth quarter from last year, reflecting strong sales at its beer segment due to volume growth.
Adjusted earnings per share for the quarter beat analysts' expectations, while revenues matched their estimates. Looking ahead to fiscal 2016, the company forecast earnings in line with Street estimates. In addition, the company initiated a quarterly dividend for the first time in its history.
Rob Sands, president and CEO of Constellation Brands said, "We outperformed the U.S. beer industry for the fifth consecutive year while achieving growth for every brand in our Mexican beer portfolio. And, our Nava brewery expansion is progressing as planned from a budget and timing of completion perspective."
New York-based Constellation Brands' net income for the fourth quarter was $214.6 million or $1.06 per Class A share, up from $157.2 million or $0.79 per Class A share in the prior-year quarter. Earnings per Class B convertible common stock increased to $0.98 from $0.73 in the year-ago period.
Excluding one-time items, adjusted net income for the latest quarter was $207.5 million or $1.03 per share, compared to $162.1 million or $0.81 per share in the year-ago quarter.
On average, thirteen analysts polled by Thomson Reuters expected the company to report earnings of $0.94 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 5 percent to $1.36 billion from $1.29 billion in the same quarter last year, in line with analysts' consensus.
Net sales for the beer segment rose 11 percent from the year-ago period, primarily due to volume growth driven by continued strong consumer demand.
Wine and spirits net sales were flat with last year. On an organic constant currency basis, wine and spirits net sales rose 2 percent from the year-ago period, reflecting favorable mix and distributor performance payments. This was partially offset by lower volume.
Wine and spirits shipment volume for the quarter decreased 4.2 percent, while beer shipment volume grew 10.6 percent.
The company's gross margin for the quarter rose to 44.1 percent from 42.5 percent in the year-ago period.
Looking ahead to fiscal 2016, Constellation Brands forecast reported earnings in a range of $4.55 to $4.75 per share and comparable earnings of $4.70 to $4.90 per share. Analysts expect the company to report earnings of $4.85 per share for the year.
Constellation Brands said its board of directors has approved the initiation of a dividend program, under which the company intends to pay a regular quarterly cash dividend to stockholders of its common stock.
The board declared an initial quarterly cash dividend of $0.31 per share of Class A common stock and $0.28 per share of Class B common stock. The dividend is payable on May 22, 2015 to stockholders of record as of the close of business on May 8, 2015.
STZ closed Wednesday's trading at $119.17. In Thursday's pre-market activity, the stock is trading at $118.30, down $0.87 or 0.73 percent.
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