Constellation Brands Inc raised its full-year adjusted earnings forecast and beat Wall Street estimates for quarterly profit on Wednesday, driven by strong demand for its beers such as Corona Premier and Modelo Especial.
Shares of the company rose 4% in premarket trading.
The upbeat results and raised forecast signal that the brewer benefited from its efforts to beef up its beer portfolio through launches of variants such as Modelo Chelada Limon y Sal and Corona Refresca.
The company now plans to add a seltzer to its Corona portfolio this year, looking to tap into the surging popularity of the alcoholic carbonated drink among millennials.
Sales of beers, its biggest and more profitable unit, rose 8.3% to $1.31 billion in the third quarter ended 30 November, while that in its struggling wines and spirits segment fell 9.7% to $688.8 million, the four consecutive quarter of declines.
The brewer now expects to earn $9.45 to $9.55 per share for its fiscal 2020, excluding the impact from its investment in Canadian cannabis producer Canopy Growth on a comparable basis, up from its prior forecast of $9 to $9.20.
Net sales climbed 1.4% to $2 billion, beating the average analyst estimate of $1.95 billion, according to IBES data from Refinitiv.
Net income attributable to the company rose 19% to $360.4 million, or $1.85 per Class A share.
Excluding one-time items, Constellation earned $2.14 per share, beating estimates of $1.83.
The company also recognized a $534 million decrease in the fair value of its over $4 billion investment in Canopy in the quarter.
Shares of the Victor, New York-based company climbed about 18% in 2019.