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Jim Cramer Gives His 'Optimistic View' on Talks Between GM and Nikola
Jim Cramer Gives His 'Optimistic View' on Talks Between GM and Nikola

Constellation Swings to Profit and Tops Estimates

Constellation swung to profit from a year-ago loss. It posted a 15-cent-a-share loss on its stake in cannabis company Canopy Growth
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Constellation Brands  (STZ) - Get Free Report swung to a fiscal-second-quarter profit from a year-earlier loss, topping analyst estimates for the period. 

For the quarter ended Aug. 31 the Victor, N.Y., liquor producer reported net income of $512.1 million, or $2.62 per Class A share, compared with a loss of $525.2 million, or $2.77, in the year-earlier quarter. 

The latest adjusted earnings of $2.76 a share exceeded the consensus analyst expectation of $2.51 a share in a survey by FactSet. 

Net sales for the period fell 3.6% to $2.26 billion, also topping the analyst estimate of $2.19 billion. 

"We remain confident in the resiliency of our business, our brand health and consumer takeaway remain strong, and we are well positioned to deliver a solid year of organic growth in fiscal 2021," Chief Executive Bill Newlands said in a statement.

Constellation reported that its operating margin widened 0.7 percentage point in the quarter to 42.5%, "as benefits from favorable pricing and reduced marketing spend were partially offset by increased cost of goods sold." 

The company's equity stake in Canadian cannabis producer Canopy Growth  (CGC) - Get Free Report  generated a loss of $31 million, or 15 cents a share.

Constellation's beer business reported almost 5% growth in cases sold by distributors to retailers. A "strong performance in off-premise channels continues to more than offset the covid-19-related impact of the nearly 50% reduction in the on-premise channel," the company statement said.

In the beer segment, its Modelo and Pacifico brands reported cases-sold growth of 9% and almost 30%, respectively. 

Constellation Class A shares at last check were 0.3% higher at $190.