Constellation Brands books loss on stake in cannabis company Canopy Growth

Alcohol giant Constellation Brands Inc.'s latest quarterly results were weighed down by millions in losses and a writedown in connection with its significant stake in Canadian cannabis producer Canopy Growth Corp., but it still beat market expectations.

The U.S.-based producer of Corona beer reported a loss per share of $2.77 or earnings of $2.72 on an adjusted basis for what was the second quarter of its 2020 financial year, surpassing the $2.60 in earnings expected by analysts, according to the financial markets data firm Refinitiv.

Constellation, which is Canopy's largest shareholder, said that excluding the pot producer's equity losses it earned $2.91 per share on a comparable basis.

Constellation also said it recognized a total loss of $484.4 million in the quarter as its share of Canopy Growth's equity losses and related activities, or a loss of $54.7 million on a comparable basis.

It also recognized a $839-million decrease in the fair value of its Canopy investments during the quarter ended Aug. 31, sending Constellation's shares in New York down roughly six per cent to $194.24 in midday trading.

Constellation's results come after Canopy ousted its co-founder and co-chief executive Bruce Linton in July following comments by the Modelo beer maker in June that it was "not pleased" with the pot producer's latest financial results.