Constellation Brands posts $51 million loss in 4th-quarter on sliding wine sales

Winemaker Constellation Brands posts 4Q loss

ROCHESTER, N.Y. — Constellation Brands, which markets Mondavi wine, Svedka vodka and Corona beer, said Friday its fiscal fourth-quarter loss narrowed to $51 million on sliding sales on spirits and beer.

The world’s biggest wine company by volume, with brands such as Robert Mondavi and Clos Du Bois, also projected its earnings in the current fiscal year will come in well below Wall Street’s average expectation.

In premarket trading, Constellation shares fell 81 cents, or 4.8 percent, to $16.04.

The company said it lost the equivalent of 23 cents per share in the quarter ended Feb. 28. That compared with a loss of $406.8 million, or $1.88 cents per share, a year earlier.

Excluding one-time costs, however, it earned 27 cents a share, 3 cents per share better than the average estimates of analysts surveyed by Thomson Reuters.

Sales fell 3.6 percent to $708.7 million from $735.1 million.

The company said it expects to earn $1.53 to $1.68 per share in the 2011 fiscal year, which began March 1. But analysts expect, on average, a profit of $1.77 per share.

Beer sales fell 4 percent in the quarter to $419 million, and spirits sales slumped 49 percent to $48 million.

Sales of branded wines, which account for the bulk of its revenue, rose 2 percent to $620 million. But in the North America market, sales fell 3 percent to $207 million.

The company also said it would buy back up to $300 million of its common stock.

After a two-decade acquisition spree, the company sold off cheaper “value” brands to focus on the more lucrative premium end of the wine and spirits markets. Over the last year, its work force fell to 6,600 from 8,000 as it ditched wineries and product lines and consolidated its distribution network.

Based in Victor, 20 miles southeast of Rochester, the company sells about 70 wine brands and liquors such as Paul Masson brandy and Black Velvet Canadian whiskey. It also imports beers such as Negra Modelo from Mexico, Tsingtao from China and St. Pauli Girl from Germany.