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
- Constellation’s guidance was impacted by its recent
investment in the Canadian cannabis producer Canopy
Constellation Brands trade live.
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
$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
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
Constellation Brands was down 22% in the past twelve
Source: FS – All – Economy – News
The maker of Corona beer is plunging after slashing guidance because of its marijuana acquisition (STZ)