Despite solid third-quarter results, constellation brands are still falling

Despite solid third-quarter results, constellation brands are still falling

When Constellation Brands Inc. (NYSE: STZ) announced its third-quarter financial results before the opening of the market on Friday, it said earnings per share were $200 and revenue was $1.8 billion. By contrast, Thomson Reuters generally expects earnings per share to be $189 million and revenue to be $1.87 billion. Earnings per share for the same period last year were reported to be $1.96 billion and $1.81 billion, respectively.

In the quarter, the Board approved a $3 billion repurchase plan. Considering the constellation's market value is only $44 billion, this is a considerable repurchase.

Beer sales grew by 8.0% in the quarter compared with last year, while wine and spirits sales fell by 10.3%. During Labor Day and Thanksgiving, the beer industry benefited from sales growth. The decline in wine and liquor sales reflects the company's divestiture of its Canadian wine business in December 2016.

In terms of guidance, the company now expects annual earnings per share to be between $8.40 and $8.50. It is widely expected that earnings per share will be $8.43 and revenue will be $7.64 billion this year.

It is worth noting that Constellation Brand invested $190 million to acquire a minority stake in a Canadian marijuana company in the current quarter. This is the first major step for alcohol brands to enter the cannabis industry. Specifically, the constellation brand bought a 10% increase in the crown.

Earlier on Friday, the constellation brand's share price fell about 1% to $218.45. Analysts agreed that its target price was $239.47, with a 52-week trading range of $146.40 to $229.50.

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