Constellation Brands raises full-year profit forecast after quarterly beat

(Reuters) – Constellation Brands Inc (N:) raised its full-year adjusted profit forecast on Thursday, after beating Wall Street estimates for second quarter profit on the back of strong summer demand for Corona and Modelo beers.

Shares of the company were, however, down nearly 4% in premarket trading, as it said it took a $839 million write down in the value of its investment in pot firm Canopy Growth (TO:) during the quarter.

Constellation has invested more than $4 billion in the loss-making Canopy, banking on the proposed legalization of recreational weed in several countries.

The brewer raised its adjusted profit forecast, excluding the costs related to its investment in Canopy, to $9 to $9.20 range from the previous range of $8.65 to $8.95, but cut its fiscal 2020 earnings per share on a reported basis to 55 cents to 75 cents range from $4.95 to $5.25.

Sales of beers, its biggest business, rose about 7.4% to $1.64 billion in the second quarter.

Net sales rose to $2.34 billion from $2.30 billion, in line with the average analyst estimate, according to IBES data from Refinitiv.

Excluding one-time items, Constellation earned $2.72 per share in the quarter ended Aug. 31, above analysts’ estimates of $2.60 per share.

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