Constellation Brands reported significantly lower second quarter net income on Thursday, which came in below analysts’ estimates. The company reported higher revenues, but failed to meet expectations.
Inside Constellation Brands' Results
The company reported Q2 net income of $195.8 million, or 98 cents per share, down from $1.52 billion, or $7.74 per share, in the same quarter last year. For the company’s Class B stock, EPS was 90 cents per share, compared to $7.11 per share a year ago.
The company noted that the significant decline in earnings was due to a higher tax rate and a beer recall. In addition, last year’s earnings included a non-cash $1.6 billion gain. Excluding these items, earnings were $222 million, or $1.11 per share, compared to $188.7 million, or 96 cents per share, a year ago. Analysts expected to see adjusted earnings of $1.15 per share.
Sales grew 10% to $1.60 billion from $1.46 billion a year ago. Analysts expected to see $1.64 billion in revenue.
The company has cut its forecast for FY2015 to an EPS range of $3.85 to $4.00 per share. Previously, the company reported an outlook of $3.90 to $4.25 per share.
Mutual Funds to Watch
With any major earnings release, it is important to examine the mutual funds that have the largest stake in the company. Below are the mutual funds with the largest stake in Constellation Brands.
|VMCIX||Vanguard Mid Cap Index||1.41%|
|VFINX||Vanguard 500 Index Inv||1.35%|
The Bottom Line
Mutual fund investors should be aware of the performance of the major holdings in the the funds that they own. Earnings reports, such as today’s release from Constellation Brands, are a great way to measure holdings.