Constellation Brands (NYSE:STZ) earnings for the alcohol company’s fiscal second quarter of 2020 has STZ stock taking a hit on Thursday. The earnings report includes comparable per-share earnings of $2.72 on revenue of $2.34 billion. For comparison, Wall Street was estimating earnings per share and revenue of $2.60 and $2.34 billion.
Let’s take a closer look at what happened during the most recent Constellation Brands earnings report.
- Comparable EPS for the quarter was down 5.23% from the fiscal second quarter of 2019.
- Reported earnings per share dropped from a positive in the same period of 2019 to a loss this quarter.
- That includes STZ seeing its net income turn to a net loss in its fiscal second quarter of 2020.
- That switch over to losses comes from Constellation Brands’ investment in marijuana company Canopy Growth.
- This resulted in the company seeing a loss of $484.40 million in connection to that investment.
David Klein, CFO at Constellation Brands, said this in a call with investors transcribed by Motley Fool.
“Shifting to our investment in Canopy Growth. The total pre-tax net gain recognized since our initial Canopy investment in November of 2017 is $757 million. In Q2, we recognized a $1.2 billion gain on our modified Canopy warrants, partially offset by approximately $400 million of loss in equity and earnings, which reflects CBI share of additional loss on the modification.”
The Constellation Brands earnings report also holds an update for its fiscal 2020 outlook. This includes it expecting comparable per-share earnings, when excluding Canopy Growth, ranging from $9.00 to $9.20. For comparison, Wall Street is expecting STZ to report earnings per share of $8.43 for the fiscal year.
STZ stock was down 5% as of Thursday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.