Constellation Brands Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Constellation Brands, Inc. (NYSE:STZ) will unveil its latest earnings on Friday, October 5, 2012. Constellation Brands is a wine company with operations in the United States, Canada, the United Kingdom, Australia and New Zealand.

Constellation Brands, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 54 cents per share, a decline of 29.9% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 57 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 54 cents during the last month. For the year, analysts are projecting profit of $1.99 per share, a decline of 15% from last year.

Past Earnings Performance: The company is looking to beat analyst estimates for the third quarter in a row. Last quarter, it beat estimates with net income of 40 cents per share against the mean estimate of 39 cents. In the prior quarter, the company reported profit of 69 cents.

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Stock Price Performance: Between July 6, 2012 and October 1, 2012, the stock price rose $4.21 (14.8%), from $28.46 to $32.67. The stock price saw one of its best stretches over the last year between June 11, 2012 and June 19, 2012, when shares rose for seven straight days, increasing 6.3% (+$1.18) over that span. It saw one of its worst periods between November 11, 2011 and November 25, 2011 when shares fell for 10 straight days, dropping 12.2% (-$2.49) over that span.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.35 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

A Look Back: In the first quarter, profit fell 3.4% to $72 million (38 cents a share) from $74.5 million (31 cents a share) the year earlier, but exceeded analyst expectations. Revenue was unchanged at $634.8 million.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of four-straight quarters of revenue decreases. Revenue fell 20% in the second quarter of the last fiscal year, 27.5% in third quarter of the last fiscal year and 12.2% in the fourth quarter of the last fiscal year and then fell again in the first quarter.

After experiencing income drops the past three quarters, the company is hoping to use this earnings announcement to rebound. Net income fell 24.8% in the third quarter of the last fiscal year, by 63.2% in the fourth quarter of the last fiscal year and again in the first quarter.

Wall St. Revenue Expectations: Analysts predict a rise of 2.9% in revenue from the year-earlier quarter to $710.1 million.

Analyst Ratings: With four analysts rating the stock a buy, none rating it a sell and two rating the stock a hold, there are indications of a bullish stance by analysts.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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