Constellation Brands Earnings: An Early Look

Spring is finally here, and a new earnings season is getting under way. On Wednesday, Constellation Brands (NYSE: STZ  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Constellation Brands has been at the center of the frenzy of consolidation that's been going on in the beer, wine, and spirits industry recently. Can the company hold its own against increasingly tough competition on a number of fronts? Let's take an early look at what's been happening with Constellation Brands over the past quarter and what we're likely to see in its quarterly report on Wednesday.

Stats on Constellation Brands

Analyst EPS Estimate

$0.45

Change From Year-Ago EPS

(35%)

Revenue Estimate

$667 million

Change From Year-Ago Revenue

6.1%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

Can Constellation Brands lift investors' spirits this quarter?
Analysts have gotten more optimistic about Constellation's earnings prospects in recent months, as they've lifted their estimates both for the just-ended quarter and for the entire 2013 fiscal year. That optimism has definitely shown up in Constellation's share price, as the stock has risen 35% just since the beginning of the year.

For almost a year now, Constellation has been dealing with the changing prospects of Anheuser-Busch's (NYSE: BUD  ) attempts to buy Grupo Modelo. To avoid antitrust concerns, Anheuser-Busch had agreed to sell its stake in the Crown Imports joint venture to Constellation, giving it complete control of Crown Imports. Moreover, the deal would also have allowed Constellation to import Corona and Modelo Especial.

Since it was initially proposed, the Grupo Modelo deal has gone through big ups and downs. In early February, the Justice Department blocked the deal, arguing that Anheuser-Busch would have too much pricing control if the deal went through. Yet just a couple of weeks later, a new agreement that added in Constellation's taking over Grupo Model's Piedras Negras brewery for $2.9 billion seemed to satisfy the Justice Department, and shares soared as the deal appears to be back on.

Nevertheless, Constellation Brands hasn't been standing still waiting for Anheuser-Busch to figure out how to get its deal done. Last month, Constellation moved forward with a distribution deal with Brazil's Interfood Importacao, whereby the local company will offer Robert Mondavi wine, Svedka vodka, and other products throughout the South American giant. The move is just the latest in Constellation's attempts to bolster its emerging-market presence.

In its earnings report, watch for Constellation to report on the status of the Anheuser-Busch deal as well as its other strategic moves. If the deal finally gets done, the future looks extremely bright for Constellation.

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