Constellation Brands' quarterly profit handily beat analysts' estimates and the company raised its full-year adjusted profit forecast for the second time, driven by higher sales of beers under its Corona and Modelo brands.
The company's shares rose 3.8 percent to $136.25 in premarket trading on Wednesday.
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Constellation is benefiting from strong demand from the rising Hispanic population in the United States who prefer the company's beer brands such as Modelo Especial and from other consumers switching to Mexican beers.
The company said in June it will invest more than $2 billion in its Mexican operations to expand its bottling and brewery plant in Coahuila.
Constellation said on Wednesday net beer sales rose 14 percent to $1.02 billion in the quarter ended Aug. 31, accounting for about 59 percent of net sales.
Net sales in the company's wine and spirits business, which includes Robert Mondavi wine and Svedka Vodka, fell 0.3 percent to $713.9 million, hurt by a strong dollar.
Net income attributable to the company rose to $302.4 million, or $1.49 per share, in the second quarter, from $195.8 million, or 98 cents per share, a year earlier.
Excluding items, the company earned $1.56 per share.
Net sales rose 8.1 percent to $1.73 billion.
Analysts on average had expected earnings of $1.32 per share on revenue of $1.73 billion, according to Thomson Reuters I/B/E/S.
Constellation raised its adjusted earnings forecast to $5-$5.20 per share from $4.80-$5.00 for the year ending February. It had increased the forecast in July.
The company said it now expects operating income in the beer business to grow 15-18 percent for the full year, up from 13-15 percent earlier.
Operating income in the beer business rose 31 percent in the second quarter, helped by higher volume sales and lower costs of product sold.
The global beer market is set for a shake-up, with Anheuser-Busch InBev, the world's largest brewer, making a $104 billion bid for rival brewer SABMiller. A takeover would create a colossus producing a third of the world's beer.
Up to Tuesday's close, Constellation's shares had gained about 33 percent this year.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Sriraj Kalluvila)