Constellation Brands (NYSE:STZ), the world's largest branded wine maker, said fourth-quarter profit dropped 21 percent as tax and interest expenses rose.
Net income for the quarter that ended Feb. 28 retreated 21 percent to $82 million, or 43 cents a share, from $103 million, or 44 cents a share, in the year-earlier period, the Victor, New York-based company said in a statement on Wednesday.
Excluding restructuring charges and unusual items, earnings were 47 cents a share, exceeding the average estimate of 12 analysts who forecast a profit of 45 cents a share.
Interest expense rose 26 percent to $60 million, primarily due to higher average borrowings, according the statement.
Net sales in the quarter rose 11 percent to $696 million, compared with 626.1 million a year earlier, helped by growth in organic net sales combined with benefits from the Mark West acquisition.
The shares slid 1.3 percent to $48.10 in premarket trading in New York on Wednesday.
"This has been an exciting year for Constellation," the company said, citing CEO Rob Sands. "From an operational perspective, we outperformed the growth of the U.S. wine and spirits industry gaining market share collectively across all channels."
Looking ahead, Constellation projected full-year earnings of $2.29 to $2.59 per share in fiscal 2014, compared with $2.04 in fiscal 2013, assuming the beer business acquisition closes at the end of the first quarter.
In February, Constellation entered into an agreement to buy the Piedras Negras brewery in Mexico and the perpetual brand rights for Corona and all other Modelo brands in the U.S.
"Constellation will become a fully independent beer competitor in the U.S. and will have perpetual rights for all Modelo brands with autonomous control of distribution, marketing, promotion and pricing," Sands said in the statement.
The stock, which gained 37 percent this year through Tuesday, has a consensus among 13 analysts to be "held".
Constellation Brands produces and markets beverage alcohol in North America, Europe, and Australia, and New Zealand.
The company's portfolio of brands includes Robert Mondavi, Clos du Bois, Kim Crawford, Inniskillin, Franciscan Estate, Mark West, Ruffino, Simi, Estancia, Corona Extra, Black Velvet Canadian Whisky and SVEDKA Vodka.