We’re just a few days away from third-quarter earnings season kicking off, which will start with Alcoa Inc.‘s (AA) earnings report on Tuesday morning. In the meantime, a few companies are making headlines with their off-cycle earnings reports. Today, one of my top beverage stocks rose to an all-time high after a strong second-quarter report. Let’s review the details…
Constellation Brands Inc. (STZ) did not disappoint with its fiscal second-quarter report. Last quarter, the beverage company reported $1.77 adjusted earnings per share on $2.02 billion in revenue.
Compared with the year ago quarter, this represents 14% earnings growth and 17% sales growth. The consensus estimate was for $1.65 EPS on $1.96 billion in sales, so Constellation Brands posted a 7.3% earnings surprise and a 3.1% sales surprise.
According to management, Constellation Brands’ beer business experienced 20% sales growth, driven in part by the recent acquisition of Ballast Point craft beer. The company also announced that it is acquiring Utah’s High West Distillery for $160 million. High West is known for producing American straight whiskeys and other spirits, and it has enjoyed double-digit volume growth for the past three years.
Finally, Constellation Brands declared a quarterly dividend of $0.40 per share. Shareholders of record on November 8 will receive the dividend on November 22. At current prices, STZ has a 1.0% annual dividend yield. Shares rose to an all-time high after the news.
I consider STZ a B-rated Buy in Portfolio Grader, and I currently recommend it in my Blue Chip Growth newsletter.