VICTOR, N.Y. (AP) — Constellation Brands Inc.'s fiscal first-quarter net income fell as wine and spirit sales dipped, but its adjusted results topped Wall Street's expectations. The alcoholic beverage company also announced Friday that it is purchasing the remaining 50 percent stake of Crown Imports LLC that it doesn't already own for $1.85 billion.
Constellation will also be buying the Mark West pinot noir brand for about $160 million.
Its shares gained $2.74, or 12.6 percent, to $24.50 in premarket trading.
The Victor, N.Y. company, whose brands include Robert Mondavi and Simi, earned $72 million, or 38 cents per share, for the three months ended May 31. That's down from $74.5 million, or 35 cents per share, a year earlier.
The per-share discrepancy is due to fewer shares outstanding in the current quarter.
Excluding restructuring charges and other items, earnings were 40 cents per share.
Analysts polled by FactSet expected earnings of 39 cents per share, on average.
Revenue after excise taxes slipped less than 1 percent to $634.8 million from $635.3 million. Wall Street forecast $645.4 million.
Wine and spirits sales fell 1 percent on a constant currency basis due to increased promotional costs and lower volume. This was somewhat offset by a favorable product mix.
Constellation maintained its forecast for fiscal 2013 adjusted earnings of $1.93 to $2.03 per share.
Analysts predict earnings of $1.99 per share.
Constellation said that its buyout of the remaining stake in Crown Imports from Anheuser-Busch InBev SA/NV that it doesn't already own will make it the third-biggest total beverage alcohol company in the U.S. Crown's beers include Corona Extra, Corona Light, Modelo Especial, Pacifico, Victoria and Negra Modelo.
Constellation expects to close the transaction during the first quarter of 2013.
The company will suspend a $1 billion share buyback program which is about $700 million shy of topping out.
Constellation said that the Mark West acquisition is expected to close next month and will likely add slightly to its fiscal 2013 earnings per share. The brand retails for $10 to $12 and is currently the top-selling pinot noir brand in the U.S.
"Mark West is an exciting addition to our family of brands," Constellation President and CEO Rob Sands said in a statement. "It is a high growth, complementary brand to our existing portfolio."