ROCHESTER, New York (AP) — Constellation Brands Inc., maker of Robert Mondavi wine and Svedka vodka, said Thursday its first-quarter profit jumped 52 percent to $75 million on improved wine and spirits sales in North America.
The company, which also sells imported beers such as Corona, said its revenue dropped 19 percent to $635 million largely because it sold the bulk of its struggling Australian and British wine business.
Net income equaled 35 cents per share. A year earlier, the company earned $49.1 million, or 22 cents a share, as sliding sales of wine in the key North American wine market were more than offset by lower restructuring charges.
Wine and spirits sales rose 3 percent in North America in the March-to-May quarter.
Excluding one-time items, including a $26 million charge related to the divestiture, Constellation earned 39 cents per share. Wall Street expected 37 cents, according to FactSet. However, revenue came in below analysts' expectations of $637 million.
Boosted by volume growth, operating earnings from Crown Imports, its beer joint venture with Mexican brewer Grupo Modelo SA, rose 10 percent to $120 million on a 9 percent rise in sales of $678 million.
Constellation Brands, based in Victor, New York, lost its eight-year status as the world's No. 1 winemaker when it sold 80 percent of its Australian and British wine business in January. Investors expect the sale to create a more profitable business with less risk.
The company has been shifting to higher-priced brands. Wine sales still account for more than 90 percent of its revenue.
Its wines include Clos du Bois, Woodbridge by Robert Mondavi, Blackstone and Ravenswood. It also sells liquors such as Black Velvet Canadian whiskey and imports such beers as Modelo Especiale from Mexico, Tsingtao from China and St. Pauli Girl from Germany.
Constellation Brands, which employs 6,000 people, is No. 2 in the global rankings of wine makers behind E. & J. Gallo Winery of Modesto, California. It had moved ahead of Gallo in 2003, when it bought Australian vintner BRL Hardy Ltd. for $1.1 billion.
