Wine and liquor marketer Constellation Brands 3Q profit falls on weaker US wine sales, items

 Constellation Brands Inc., which markets Mondavi wine, Svedka vodka and Corona beer, said Thursday its third-quarter profit fell 47 per cent on restructuring-related costs and weaker U.S. wine sales.

The company, which is the world's largest winemaker and owns the former Vincor company in Canada, said its branded wine sales fell 3 per cent in the key North American market.

Chief executive Rob Sands said U.S. sales were hurt by "economic challenges" and higher promotional spending in advance of the holidays.

He also cited a shift of sales to the second quarter from the third quarter due to distributor network consolidation.

Constellation Brands said it earned $44.1 million, or 20 cents a share, in the quarter ended Nov. 30. That compared with a profit of $83.5 million, or 38 cents a share, a year earlier.

Sales fell four per cent to $987.7 million from $1.03 billion.

Excluding one-time costs, Constellation said it earned 54 cents a share, which was two cents a share above the average Wall Street estimates.

Restructuring charges, acquisition-related and other unusual items totalled $81 million, compared with $21 million in last year's third quarter.

Analysts surveyed by Thomson Reuters also expected lower net sales of $905.3 billion.

The company maintained its forecast for 2010 adjusted earnings of $1.60 to $1.70 per share. Analysts expect full-year profit of $1.65 a share.

Constellation shares (NYSE:STZ) were down 15 cents or 0.93 per cent at US$15.98 in afternoon trading. The stock had traded between $15.10 and $16.20 earlier in the day.

Overall branded wine sales, which account for the bulk of its sales, rose 2 per cent to $868 million.