On Wednesday, Constellation Brands (NYSE:STZ) will release its quarterly report, and investors have high expectations that the producer of beer and spirits will continue its impressive run of sales and earnings gains. Even though Constellation's acquisition of the U.S. beer business of Grupo Modelo helped send it head-to-head against Anheuser-Busch InBev (NYSE:BUD) and other players in the U.S. market, the company also relies on sales of other alcoholic products to bolster its overall growth and keep spirits rival Diageo (NYSE:DEO) at bay.

Constellation Brands isn't a familiar name for most consumers, but the company's brands include well-known names such as Robert Mondavi wines and Black Velvet Canadian Whisky. Still, entry to the beer market really helped Constellation Brands distinguish itself, with the Corona brand increasing Constellation's exposure dramatically. 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 report.

Source: Wikimedia Commons.

Stats on Constellation Brands

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$1.43 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Can Constellation earnings keep up the pace?
In recent months, investors have gotten even more optimistic about Constellation earnings, raising May-quarter estimates by $0.03 per share and boosting full fiscal year projections by 4%. The stock has kept rising as well, with gains of 7% since late March.

Acquisitions have played a huge role in boosting Constellation's results over the year since the Grupo Modelo acquisition. In the February quarter, net income almost doubled, and revenue climbed 86% as the purchase from Anheuser-Busch InBev continued to add to Constellation's total results. Chief Executive Officer Rob Sands said that the beer business did even better than the company had expected, with plans to expand its Mexican brewing operations in order to meet higher demand. Moreover, guidance for the 2015 fiscal year was positive, with earnings expectations of $3.95-$4.15 per share coming in mostly above what investors were looking to see.

Source: DailyBillboardBlog.com.

The genius of the expansion into the U.S. market has shown itself in the huge success of its top brands. According to Sands, Corona Extra has become the best-selling imported beer in the U.S., and Corona Light tops sales volumes for light beer. Meanwhile, its Modelo Especial brand claims the status of fastest-growing major beer brand. Even the fact that Constellation's beers tend not to perform as highly on taste tests as its competitors' beers hasn't been enough to hamper sales growth.

One of the keys of Constellation's surge has been marketing. Ad campaigns touting the Mexican coast have been highly effective, and other companies have even sought to follow the Corona ad model by tapping tropical themes for their marketing as well. In a time when craft beers have generally enjoyed great success, the staying power of Corona has been especially remarkable.

Unfortunately, Constellation's other businesses haven't been as strong. In the February quarter, wine and spirits sales rose just 1%, as growth in volume was only barely able to outweigh lower-priced consumer purchase selection and greater spending on promotional activity. By contrast, Diageo has made huge moves in the spirits industry, seeking growth around the world in an effort to solidify its leadership position against Constellation and other peers.

In the Constellation Brands earnings report, watch to see if the company can start making its non-beer business follow the successful path of its beer segment. With Diageo having found spirits quite profitable, Constellation needs to do more to make itself a broader-based beverage giant.

Click here to add Constellation Brands to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.