Constellation Brands Inc forecast full-year results below Wall Street estimates, reflecting its concerns about lackluster consumer spending on its alcoholic drinks and a frayed joint venture with Mexico's Grupo Modelo, sending shares down 4.6 percent.

Constellation has a 50 percent stake in Crown Imports, a joint venture with Modelo that imports beers like Corona into the United States. The venture faces pressure from other imported beers, while Modelo is suing Constellation over marketing costs.

Constellation did not comment on the lawsuit in its quarterly press release, but Chief Executive Rob Sands said the company's modest fiscal 2011 profit forecast partly reflects the weakness of the joint venture, as well as pressure on its Australian and UK operations.

The purveyor of Robert Mondavi wine, Svedka vodka and other drinks expects to earn $1.53 to $1.68 per share in fiscal 2011, below analysts' forecast of $1.77 per share.

The quarter looked OK but the outlook's quite soft, said Morningstar analyst Philip Gorham of Constellation's fourth-quarter results and 2011 forecast. I think things are going to remain challenging, costs will likely rise; the competitive environment isn't going to ease up anytime soon.

Corona's been a strong brand for a long time, but it's likely to continue to lose market share to new entrants as more craft and imported beers enter the United States, he said.

Constellation, the world's biggest seller of branded wine, reported a net loss of $51 million, or 23 cents per share, for its fiscal fourth quarter ended February 28, compared with a loss of $406.8 million, or $1.88 per share, a year earlier. Excluding restructuring charges it made 27 cents per share.

Sales fell 3.5 percent to $708.7 million.

Analysts on average were expecting 24 cents per share, excluding items, on sales of $733.8 million, according to Thomson Reuters I/B/E/S.

Crown Imports sales fell 4 percent during the fourth quarter, and Constellation's cut of the venture's profits fell 11 percent to $41 million.

A TAX LIFT TO PROFITS

Constellation's adjusted profit was helped by an 11-cent favorable tax contribution, assuming a 36 percent tax rate, Morgan Stanley analyst Dara Mohsenian said.

He sees the fourth quarter as the fundamental bottom and suggested that investors buy the shares on weakness.

Mohsenian, who has an overweight rating on Constellation, said the midpoint of its fiscal 2011 forecast is conservative and that share repurchases could add about 4 cents to profit this year.

Like most wine, beer and spirits companies, Constellation's sales have suffered in the downturn as consumers cut back on drinking at bars and restaurants or buy lower-priced drinks. Alcoholic drink sales at stores have risen as people drink at home instead, but that has not made up for the decline.

A survey released on Friday showed that most U.S. consumers plan to spend the same amount or less on alcoholic drinks this year.

Constellation said sales rose 2 percent in its wine business and fell 49 percent in its spirits business because of a divestiture of some of its spirits products.

Constellation's board authorized a $300 million share buyback program.

On Wednesday, Constellation said it and Australian Vintage decided to end discussions on combining the companies' Australian and British wine operations.

Constellation shares were down 77 cents, or 4.6 percent, to $16.08 in morning trading.

(Reporting by Phil Wahba and Martinne Geller in New York and Jessica Wohl in Chicago, editing by Gerald E. McCormick, Derek Caney and Robert MacMillan)

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