logo-loader
HealthCannabis
viewConstellation Brands

Corona beer firm Constellation Brands sees second quarter results dented by big write-down in Canopy Growth investment

The group took a $839 million write-down on the investment's value, having ploughed more than $4 billion in to the loss-making company

Female weed smoker
The write-down took the froth of the brewer’s move to raise its adjusted fiscal 2019 earnings forecast

Constellation Brands Inc (NYSE:STZ) saw its shares drop on Thursday after the Corona and Modelo beers firm posted second quarter results dented by a big write-down from its investment in cannabis company Canopy Growth (CSE:WEED).

The NYSE-listed group took a $839 million write-down in the value of its investment in Canopy Growth during the quarter having invested more than $4 billion in the loss-making company as it banks on the benefits of planned legalization of recreational weed in several countries.

READ: There’s a thirst for cannabis-infused beverages but which way will the market flow?

The write-down took the froth of the brewer’s move to raise its adjusted fiscal 2019 earnings forecast, excluding the Canopy costs, to a $9.00 to $9.20 per share range, up from the previous range of $8.65 to $8.95 per share.

However, Constellation chopped its fiscal 2020 earnings per share estimate on a reported basis to a $0.55 to $0.75 range, down from the $4.95 to $5.25 range forecast previously.

In its second quarter ended August 31, 2019, excluding one-time items, Constellation earned $2.72 per share, above analysts’ estimates for $2.60 per share.

The firm’s net sales in the quarter rose to $2.34 billion from $2.30 billion, in line with the consensus estimate, while sales of beers - its biggest business - increased by around 7.4% to $1.64 billion.

In afternoon trade in New York, Constellation’s shares were 5.2% lower at $195.90.

Contact the author at [email protected]

Quick facts: Constellation Brands

Price: 197.02 USD

NYSE:STZ
Market: NYSE
Market Cap: $37.76 billion
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Buds & Duds: Cannabis stocks quiet into the weekend after milestone week in...

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada fell 1.6% to 139.34 points. Elsewhere, the Horizons Marijuana Life Sciences Index ETF lost 2.5% to C$10.77, while the OTCQX Cannabis Index sank 1.5% to...

8 hours, 56 minutes ago

2 min read