- Constellation Brands, the company behind Corona beer, beat on both the top and bottom lines.
- But the company slashed its guidance for full-year comparable earnings to below Wall Street expectations.
- Constellation's guidance was impacted by both its recent investment in the Canadian cannabis producer Canopy Growth and the weakness in its wine and spirits business.
- Watch Constellation Brands trade live.
Constellation Brands, the company behind Corona beer, plunged 11.45% to $152.61 early Wednesday after slashing its guidance.
Constellation Brands adjusted its full-year comp earnings guidance to $9.20 to 9.30 a share, down from its previous forecast of $9.60 to $9.75. Analysts surveyed by Bloomberg were expecting $9.43 a share.
Constellation's guidance was impacted its $4 billion investment in the Canadian cannabis producer Canopy Growth, which was closed in November. The company said it lowered the fair value of its Canopy investment recognized for the third quarter by $164 million.
"The company estimates the interest expense associated with this transaction to approximate $55 million before tax with an approximate $0.25 impact on fiscal 2019 EPS results, both of which have been included in the guidance assumptions noted above," Constellation said in a press release.
The drink maker added that weakness in its wine and spirits business also impacted its outlook.
“For the wine and spirits business, the company now expects net sales and operating income to decline low-single digits,” Constellation said.
Constellation posted $1.97 billion of comparable sales in the third quarter, topping the $1.91 billion that was expected by Wall Street, according to Bloomberg data. Comparable basis earnings came in at $2.37 a share, which was $0.31 higher than what analysts were anticipating.
Constellation Brands was down 22% in the past twelve months.