Talk about a quick move to the downside. Just yesterday, shares of wine and alcoholic beverage producer and distributor Constellation Brands (NYSE:STZ) were trading at $29 -- right at their 52-week highs. But after a weak earnings report the shares are trading at $24.10 -- only slightly above their lows over the past year. Buying opportunity?

Put the stock on ice for the time being; Constellation is working through a number of issues that are dragging earnings down. These include a large acquisition of Canadian wine firm Vincor and weakness in the UK market. As a result, it's difficult to discern what the true earnings potential of the firm is. Management just lowered fiscal year 2007 guidance to $1.65-$1.70 from $1.72-$1.76. But this is on a "comparable" basis, and reported diluted earnings are expected to come in at $1.32-$1.37 because of a number of moving parts from the recent purchase.

Total sales for the fiscal third quarter grew 18.4%. Most of this was thanks to the Vincor acquisition, as overall organic growth was about 4%. On a positive note, the imported beer business grew 16% on an organic basis, as U.S. consumers appear to be embracing brands such as Corona and St. Pauli Girl over domestic brands from Miller, Molson Coors (NYSE:TAP), and Anheuser-Busch (NYSE:BUD).

But conditions in the U.K. remain grim. Management detailed that difficulties have intensified over the last quarter, and that a small handful of retailers control the market and related product mix and pricing. Additionally, Australian wines are very popular in the U.K. and oversupply from the region is driving low-cost bulk wine purchases at the expense of more premium brands. A drought in Australia is expected to bring supply and demand back into balance, but Constellation isn't certain as to when this will happen.

Australian conditions aren't hurting the U.S. market, as imports from down under make up only 8% of the wine market. Management detailed that domestic wines make up over 75% of the total, and Constellation is well positioned here at home, as it acquired Robert Mondavi back in 2004.

Constellation will remain on my watch list until U.K. conditions improve and investors are better able to verify if the Vincor acquisition will end up helping top- and bottom-line growth trends. The jury is currently out and debt taken on to fund the purchase has increased interest expense, further hitting reported earnings figures. In the meantime, investors may also want to check out competitors such as Fortune Brands (NYSE:FO), Brown-Forman (NYSE:BF-A), or Motley Fool Income Investor selection Diageo (NYSE:DEO).

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Fool contributor Ryan Fuhrmann is long shares of Diageo, but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. Anheuser-Busch is an Inside Value selection. The Fool has an ironclad disclosure policy.