Constellation Brands Inc. gained in early trading after posting profit and sales last quarter that topped analysts estimates and raising its full year earnings forecast.

Comparable earnings of US$2.14 a share in the third quarter was well above the US$1.84 average of estimates, amid growth from its beer brands Modelo Especial and Corona. Comparable profit for the full year will be US$9.45 to US$9.55 a share, up from a previous forecast for as much as US$9.20.

Key Insights

• Constellation has been leaning heavily on its beer business, where it’s aggressively advertising the Modelo Mexican import brand to boost sales. The brewer also is creating new items under the Corona brand in the popular hard seltzer category, with a 90-calorie drink planned to launch this year.

• Constellation has been working on fixing its portfolio in recent years, buying a stake in the world’s most valuable cannabis company, Canopy Growth Corp., while selling part of its wine and spirits unit to E&J Gallo Winery. Last month, Constellation said it was divesting Ballast Point, a craft beer it bought for about US$1 billion just four years ago.

• Since investing in Canopy, Constellation Chief Executive Officer Bill Newlands has said he’s not happy with its performance. On Wednesday, the company said it recognized a US$534-million decrease in the fair value of the investment in the third quarter. In December, Canopy named Constellation executive David Klein as CEO, raising the odds that the beer maker will buy Canopy outright.

Market Reaction

• Constellation shares rose as much as 3.6 per cent to US$190.22 in premarket trading Wednesday. The stock gained 18 per cent last year, trailing the S&P 500 Index.​