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Can Constellation Brands Impress with Fiscal 2Q18 Results?

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Part 4
Can Constellation Brands Impress with Fiscal 2Q18 Results? PART 4 OF 6

Constellation Brands’ 2Q18 Earnings: What Do Analysts Expect?

Strong earnings trend

Constellation Brands (STZ) exceeded analysts’ expectations in all quarters of fiscal 2016 and fiscal 2017 and in fiscal 1Q18. The company is scheduled to announce its fiscal 2Q181 results on October 5, 2017. In fiscal 1Q18, which ended on May 31, 2017, the company’s adjusted EPS (earnings per share) rose 52.0% on a year-over-year basis.

Constellation Brands’ 2Q18 Earnings: What Do Analysts Expect?

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Impressive earnings growth

In fiscal 1Q18, which ended on May 31, 2017, Constellation Brands’ adjusted EPS was $2.34. The company handily exceeded the consensus analysts’ earnings estimate of $1.98 per share.

Higher sales, adjusted operating margin expansion, and a lower effective tax rate drove the strong growth of the company’s adjusted EPS in fiscal 1Q18.

Its adjusted effective tax rate was 19.4% in fiscal 1Q18 compared to 31.6% in fiscal 1Q17. The lower rate was due to the benefit of reinvesting foreign earnings under APB 23 and the adoption of an accounting standard (ASU 2016 09) associated with the excess tax benefits from stock-based payments.

Earnings expectations

Analysts expect Constellation Brands’ adjusted EPS to rise 22.6% to $2.17 in fiscal 2Q18.

Rival Molson Coors (TAP) delivered adjusted EPS of $1.66 in 2Q17, reflecting a 3.1% year-over-year growth. Its 2Q17 adjusted EPS growth was driven by higher brand volume, increased net pricing, positive sales mix, cost savings, and lower marketing expenditure.

Based on the guidance issued in June 2017, Constellation Brands expects its fiscal 2018 adjusted EPS to be $7.90–$8.10 compared to $6.76 in fiscal 2017.

Next, let’s look at Constellation Brands’ valuation.

  1. Fiscal 2Q18 ended on August 31, 2017.
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