(By Balachander) Constellation Brands Inc. (NYSE:STZ) posted mixed results for the second quarter and the premium wine company updated its forecast for the year ending February 2013. Shares gained 2.25 percent in premarket trading after the company raised its comparable earnings forecast.
On a comparable basis, the company's earnings per share (EPS) fell 8 percent to 71 cents, versus market expectations of 54 cents. Reported net income dropped 23 percent to $125 million for the quarter ended August.
Net sales rose 1 percent to $699 million, trailing consensus estimate of a growth of 2.90 percent for the second quarter.
The New York-based company - whose brands include Robert Mondavi, Clos du Bois, Kim Crawford - said wine and spirits net sales were even with the year-ago quarter on an organic constant currency basis as rise in promotional costs offset volume increases.
Looking ahead for the year 2013, the company now expects comparable EPS in the range of $2.00 to $2.10 from prior expectations of $1.93 to $2.03. while analysts expect $1.99. Constellation Brands, however, cut reported EPS forecast to $1.87 to $1.97 from 1.89 to $1.99 projected earlier.
The company raised free cash flow target to $450 to $500 million for fiscal 2013.
STZ shares, which have been trading in the 52-week range of $17.95 to $34.93, ended Thursday's regular trading at $34.72.