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ROCHESTER, N.Y. (AP) -- Constellation Brands Inc., which markets Mondavi wine, Svedka vodka and Corona beer, said Thursday its third-quarter profit fell 47 percent on restructuring-related costs and weaker U.S. wine sales.
The company, which is the world's largest winemaker, said its branded wine sales fell 3 percent 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 4 percent to $987.7 million from $1.03 billion.
Excluding one-time costs, Constellation said it earned 54 cents a share, which was 2 cents a share above the average Wall Street estimates.
Restructuring charges, acquisition-related and other unusual items totaled $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 fell 62 cents, or 3.8 percent, to $15.51 in morning trading.
Overall branded wine sales, which account for the bulk of its sales, rose 2 percent to $868 million.
The 3 percent revenue drop in North America was offset by a 12 percent jump in Europe and 2 percent increase in Australia and New Zealand.
The sales increase in Europe was primarily due to higher volumes of lower priced products.
Beer sales in its Crown Imports wholesale business joint venture with Mexican brewer Grupo Modelo SA fell 10 percent to $499 million. Hit by the divestiture of the value spirits business, sales of spirits fell 2 percent.
Sands said the company "continued to execute well against our strategic goals of generating cash, paying down debt and reducing costs."
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 Corona and Negra Modelo from Mexico, Tsingtao from China and St. Pauli Girl from Germany.
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 from 8,000 to 6,600 as it ditched wineries and product lines and consolidated its distribution network.
Constellation Brands bought Australian vintner BRL Hardy Ltd. for $1.1 billion in cash and stock in a 2003 deal that made it the world's largest wine business. It jumped further ahead of longtime wine leader E.& J. Gallo Winery of Modesto, Calif., when it bought Robert Mondavi Corp. for $1.3 billion.
The company, which is the world's largest winemaker, said its branded wine sales fell 3 percent 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 4 percent to $987.7 million from $1.03 billion.
Excluding one-time costs, Constellation said it earned 54 cents a share, which was 2 cents a share above the average Wall Street estimates.
Restructuring charges, acquisition-related and other unusual items totaled $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 fell 62 cents, or 3.8 percent, to $15.51 in morning trading.
Overall branded wine sales, which account for the bulk of its sales, rose 2 percent to $868 million.
The 3 percent revenue drop in North America was offset by a 12 percent jump in Europe and 2 percent increase in Australia and New Zealand.
The sales increase in Europe was primarily due to higher volumes of lower priced products.
Beer sales in its Crown Imports wholesale business joint venture with Mexican brewer Grupo Modelo SA fell 10 percent to $499 million. Hit by the divestiture of the value spirits business, sales of spirits fell 2 percent.
Sands said the company "continued to execute well against our strategic goals of generating cash, paying down debt and reducing costs."
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 Corona and Negra Modelo from Mexico, Tsingtao from China and St. Pauli Girl from Germany.
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 from 8,000 to 6,600 as it ditched wineries and product lines and consolidated its distribution network.
Constellation Brands bought Australian vintner BRL Hardy Ltd. for $1.1 billion in cash and stock in a 2003 deal that made it the world's largest wine business. It jumped further ahead of longtime wine leader E.& J. Gallo Winery of Modesto, Calif., when it bought Robert Mondavi Corp. for $1.3 billion.
