The maker of Corona beer is plunging after slashing guidance because of its marijuana acquisition (STZ)

corona beer

  • Constellation
    Brands
    , the company behind Corona beer, beat on both the top
    and bottom lines.
  • But the company slashed its guidance for full-year
    comparable earnings to below Wall Street
    expectations.
  • Constellation’s guidance was impacted by its recent
    investment in the Canadian cannabis producer Canopy
    Growth.
  • Watch
    Constellation Brands trade live.

Constellation
Brands
, the company behind Corona beer, plunged 11.45% to
$152.61 early Wednesday after slashing its guidance because of its
recent marijuana investment.

Constellation Brands adjusted its full-year comp earnings
guidance to $9.20 to 9.30 a share, down from its previous forecast
of $9.60 to $9.75. Analysts surveyed by Bloomberg were expecting
$9.43 a share.

Constellation’s guidance was impacted by its recent investment
in the marijuana industry. In August, the beverage maker announced
a
$4 billion investment in the Canadian cannabis producer Canopy
Growth.
The deal was
closed
in November, giving it a 37% stake.

“Constellation estimates the interest expense associated with
this transaction to approximate $55 million before tax with an
approximate $0.25 impact on fiscal 2019 comparable basis EPS
results,” Constellation said in a
press release
at the time.

But the company’s updated guidance shows the impact was bigger
than expected. 

Constellation posted $1.97 billion of comparable sales in the
third quarter, topping the $1.91 billion that was expected by Wall
Street, according to Bloomberg data. Comparable earnings came in at
$2.37 a share, which was $0.31 higher than what analysts were
anticipating.

Constellation Brands was down 22% in the past twelve
months. 


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Source: FS – All – Economy – News
The maker of Corona beer is plunging after slashing guidance because of its marijuana acquisition (STZ)