Higher beer prices fattened the margins of the beer and wine producer, sending Constellation's profit way past expectations. Fred Katayama reports.
Constellation Brands can say cheers. The wine and beer producer's quarterly profit surged 42 percent, crushing analysts' forecasts and beating targets for the ninth straight quarter. Higher beer prices fattened its profit margins, and Constellation ran its breweries at full capacity during the summer. The star of its lineup: Mexican beers Corona and Modelo. Strong demand for those premium brews helped drive beer sales up nearly 13 percent. Pivotal Research Group senior analyst Tiimothy Ramey said, "Another spectacular number. The string of superlatives is pretty amazing. They're in the right segments, craft and imported segments of the beer business that's growing." The big revenue that beer brewed offset the drop in wine and spirits sales, which partly fell because Constellation sold its Canadian wine business. Overall revenue rose and beat Wall Street's targets. Investors lifting a glass, sending Constellation shares sharply higher at the market open Thursday. The stock has gained 31 percent this year.