Wine and spirits producer and marketer Constellation Brands said Thursday its fourth-quarter net income grew 21%, as strong wine sales helped offset a drop in sales of imported beer and competition in the British market.
Earnings after paying preferred dividends for the fiscal 2007 quarter ended Feb. 28 came to $70.2 million, or 29 cents a share, up from $55.8 million, or 24 cents a share, during the same period a year ago. Net income rose to 27 cents a share, from 22 cents a share a year ago.
Excluding acquisition-related integration costs, restructuring and related charges and other one-time items, the company earned 35 cents per share in the latest quarter.
Revenue grew 9% to $1.42 billion from $1.3 billion in the same period a year ago.
The results beat consensus estimates of analysts polled by Thomson Financial, who expected earnings of 34 cents on revenue of $1.1 billion.
The company, which offers brands such as Ravenswood, Simi and Vendange, said its branded wine business in North America grew 31% during the quarter, due to the June 2006 acquisition of Vincor International and a 7% growth in the base business. Meanwhile, net sales of branded wine in Europe grew 38%.
Sales of imported beers such as Corona and Tsingtao fell 56%, however, as the company changed its accounting method, and total spirits net sales fell 3%.
"While we had a solid year of organic net sales growth, our earnings performance was somewhat challenged by competitive conditions in the U.K. market," said Richard Sands, Constellation Brands chairman and chief executive. "While the U.K. and Australia challenges we faced in fiscal 2007 impacted our overall results, our branded wine business turned in a solid performance in the U.S. and Canada, as did our imported beers, spirits and wholesale businesses."