Constellation Brands, the company behind Corona beer, plunged 11.45% to $152.61 early Wednesday after slashing its guidance because of its recent marijuana investment.
Constellation Brands adjusted its full-year comp earnings guidance to $9.20 to 9.30 a share, down from its previous forecast of $9.60 to $9.75. Analysts surveyed by Bloomberg were expecting $9.43 a share.
Constellation's guidance was impacted by its recent investment in the marijuana industry. In August, the beverage maker announced a $4 billion investment in the Canadian cannabis producer Canopy Growth. The deal was closed in November, giving it a 37% stake.
"Constellation estimates the interest expense associated with this transaction to approximate $55 million before tax with an approximate $0.25 impact on fiscal 2019 comparable basis EPS results," Constellation said in a press release at the time.
But the company's updated guidance shows the impact was bigger than expected.
Constellation posted $1.97 billion of comparable sales in the third quarter, topping the $1.91 billion that was expected by Wall Street, according to Bloomberg data. Comparable earnings came in at $2.37 a share, which was $0.31 higher than what analysts were anticipating.
Constellation Brands was down 22% in the past twelve months.