Mondavi Shares Fall After Profit Warning

Bloomberg News

Shares of Robert Mondavi Corp., one of the largest U.S. wine producers, fell nearly 8% after the company warned that fiscal fourth-quarter and 1998 earnings will be 15 cents a share below estimates because of slow Chardonnay sales. Oakville-based Mondavi shares fell $2.50 to close at $29.56 in heavy trading on Nasdaq. The stock, which earlier fell to a 52-week low of $27.63, is the worst-performing beverage stock so far this year with a 39% decline. Investors and analysts said they were upset with Mondavi because trading in its shares was halted most of Monday after the company said it would hold a conference call once the market closed. Other wine stocks that fell on the pending Mondavi news recovered. Beringer Wine Estates rose 63 cents to $43.38 after trading as high as $44.75 on Nasdaq. Beringer has had better-than-expected sales in June, according to NationsBanc Montgomery Securities analyst David Goldman. "This is Mondavi's problem, not an industry problem," he said. "The difference between the two companies is the management of the brand." Mondavi said it now expects to earn about 39 cents a share in the fourth quarter ending next Tuesday. It had been expected to earn 54 cents, according to analysts.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World