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Constellation Brands Raises Earnings, Cash Flow Guidance; Stock Surges

Constellation Brands, Inc. (STZ) increased its fiscal 2020 comparable basis earnings per share outlook to $9.45 - $9.55. Analysts polled by Thomson Reuters expect the company to report profit per share of $8.51. Analysts' estimates typically exclude special items.

For fiscal 2020, the company's beer business is now targeting 7 - 8% net sales and 8 - 9% operating income growth. The wine and spirits business now expects net sales and operating income decline of 8 - 10%.

For fiscal 2020, Constellation Brands also raised its operating cash flow target to approximately $2.3 billion and free cash flow estimate to $1.5 - $1.6 billion.

For the third-quarter, Constellation Brands reported comparable basis earnings per share of $2.14, including Canopy Growth equity losses of $0.25. Excluding Canopy Growth equity losses, comparable basis earnings per share was $2.39, up 1 percent from prior year. On average, 17 analysts polled by Thomson Reuters expected the company to report profit per share of $1.83, for the quarter. Analysts' estimates typically exclude special items.

Third-quarter comparable net sales were $2.00 billion, an increase of 1 percent from previous year. Analysts expected revenue of $1.95 billion, for the quarter. Beer sales were $1.31 billion, up 8.3% from prior year. wine and spirits recorded net sales of $688.8 million, down 9.7%.

The company generated $2.1 billion of operating cash flow and $1.5 billion of free cash flow, an increase of 5% and 14%, respectively.

On January 7, 2020, Constellation's board declared a quarterly cash dividend of $0.75 per share of class A common stock and $0.68 per share of class B common Stock, payable on February 25, 2020, to stockholders of record as of the close of business on February 11, 2020.

Shares of Constellation Brands, Inc. were up nearly 3% in pre-market trade on Wednesday.

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