Tags: Constellation Brands | STZ | spirits | consumer | stocks

Constellation Brands Consolidates for Growth

By    |   Monday, 27 Jun 2011 03:19 PM

Spirits giant Constellation Brands (STZ), maker of wines such as Robert Mondavi and beers such as Corona, is making sure customers keep coming back for its products and investors keep coming back for its stock. Constellation spent the last few years strengthening brands, streamlining operations, and paying down its debts and the results are starting to show.

In the fourth quarter of the company’s fiscal year 2011, net income came to $280 million, compared to a loss of $51 million in the same period the year before. Revenue was $715 million, up about 1 percent.

For the full fiscal year 2011, revenue slipped 1 percent to $3.3 billion while net income hit $560 million, up from $99.3 million during 2010. The company has been selling business units outside of the United States, which shaved off revenue during the period but is freeing up cash.

“We generated record free cash flow, executed an accelerated stock buyback transaction and reduced debt by almost $600 million for the second consecutive year,” says Rob Sands, Constellation’s president and chief executive officer.

“Additionally, we sold our Australian and U.K. business as part of our efforts to further premiumize our portfolio.”

Ratings agencies are happy with the company’s decision free up cash and pay down debts. Fitch Ratings recently revised the company’s outlook to positive from stable.

Better debt profile

According to Fitch, Constellation Brands has shaved its debt burden to $3.2 billion as February 2011 from $5.3 billion in May of 2008, more than expected.

“The Positive Outlook reflects STZ's greater than expected debt reduction in fiscal year (FY) 2011 and its continuing commitment to reducing debt,” Fitch says in a statement.

“STZ's ratings reflect the company's leading market positions and well-known portfolio of wine, spirits and beer brands. The ratings balance general profitability stability, good operating margins, consistent (free cash flow) generation and declining leverage against the company's acquisitive nature.”

© 2017 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Companies
Spirits giant Constellation Brands (STZ), maker of wines such as Robert Mondavi and beers such as Corona, is making sure customers keep coming back for its products and investors keep coming back for its stock. Constellation spent the last few years strengthening brands,...
Constellation Brands,STZ,spirits,consumer,stocks
317
2011-19-27
Monday, 27 Jun 2011 03:19 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved