Constellation Brands Inc's quarterly earnings beat Wall Street estimates as increased marketing drove up sales, prompting the world's largest branded wine company to raise its earnings forecast for the second time this financial year.
The company that makes Robert Mondavi and Ravenswood wines expects to earn between $2.10 to $2.20 per share for the year ending Feb. 4. It had previously forecast $2.00 to $2.10 per share.
Analysts on average were expecting earnings of $2.07 per share, according to Thomson Reuters I/B/E/S.
The company, whose new labels include Simply Naked, Primal Roots and the Dreaming Tree, increased spending on marketing last year to boost sales in a weak economy.
Net sales of wine and spirits rose six percent on an organic basis during the third quarter due to higher volume sales and new products.
It has also taken major strides in the U.S. beer market by acquiring the remaining half of Crown Imports, Constellation's joint venture with Grupo Modelo SAB de CV.
The $1.85 billion deal would give Constellation full control of the U.S. distribution of Corona Extra, the best-selling imported beer in the country.
The company said it still expects to close the deal in the first quarter of 2013.
Net income rose to $110 million, or 58 cents per share, from $105 million, or 52 cents per share, a year earlier.
Excluding one-time items, it earned 63 cents per share, beating Wall Street expectations of 55 cents.
The company said a lower-than-expected tax rate due to higher foreign tax credits helped earnings. The tax rate for the third quarter was 28 percent, down from 37 percent a year earlier.
Revenue rose 9 percent to $767 million, topping analysts' average estimate of $751.8 million.
Shares of the Victor, New York-based company, which closed at $36.06 on the New York Stock Exchange on Tuesday, were up 3.8 percent in premarket trade on Wednesday. They have risen more than 80 percent in the past year.
