- Corona-maker Constellation Brands recently announced a $US4 billion investment in Canopy Growth Corp., the world’s largest publicly traded marijuana company.
- In its first earnings report since the stake was announced, Constellation’s CEO praised the investment as a “significant growth opportunity.”
- For the second quarter, Constellation topped Wall Street’s expectations and shares rose as much as 4.5%.
- Follow Constellation’s stock price in real-time here.
Constellation Brands, the owner of Corona that recently announced a $US4 billion investment into the world’s largest publicly traded marijuana company, reported second-quarter earnings that topped Wall Street expectations and sent the stock surging by as much as 4.5% in early trading Thursday.
Here are the important numbers:
- Adjusted earnings per share: $US2.87 vs $US2.56 expected
- Revenue: $US2.99 billion vs $US2.25 billion expected
A booming beer business helped fuel the beat, with an operating margin of 41.3%, up 10 basis points from the previous period. Wine and spirits, on the other hand, declined 20 bps to an operating margin of 26.1%. Beer brought in approximately three times the operating income and net sales as wine and spirits.
In August, Constellation Brands announced a $US4 billion investment in Canopy Growth Corporation, the world’s largest publicly traded cannabis company, adding to its previous stake bought last year. Constellation’s chief executive is standing by its foray into the nascent market.
“Our $US4 billion investment in Canopy Growth provides us with a strong foothold in the emerging global cannabis market, which could be one of the most significant growth opportunities of the next decade,” CEO Rob Sands said in a press release. Constellation is now the largest investor in Canopy, and its ownership could hit 38% once the transaction is complete.
Canopy Growth’s CEO Bruce Linton explained to Business Insider in July why alcohol brands and cannabis companies were a perfect match.
“We believe people should have a choice in how they wish to improve or alter their socialisation,” he said.
“Why are you having a beverage on a Friday night? It’s about a social lubricant. I think [Constellation] didn’t view themselves as a beverage company so much as an entity that provides those occasions with some kind of lift if you will – and that’s an easy way to look at cannabis, not as a threat, but as an alternative or additional.”
Constellation is scheduled to host a conference call with Wall Street analysts at 10:30 am Thursday – and cannabis is likely to be high on their list of questions.
Business Insider Emails & Alerts
Site highlights each day to your inbox.