UPDATE 3-Constellation Brands quarterly profit rises

(Adds analyst comment, share activity, details, byline)

By Martinne Geller

NEW YORK, Oct 4 (Reuters) - Beer, wine and spirits company Constellation Brands Inc (STZ.N) reported higher-than-expected quarterly profit on Thursday and raised its full-year earnings forecast, due mostly to a lower tax rate.

Declines in U.S. sales of wine brands such as Robert Mondavi and Ravenswood were not as steep as some analysts had expected, raising investors' hopes that Constellation, whose shares rose nearly 2 percent, is recovering from a glut of cheap Australian wine and a planned cut in distributors' inventories.

But analysts, including Wachovia's Jonathan Feeney, who rates Constellation shares "market weight," said it was too early to recommend the shares.

"While a decline in fundamentals appeared less worrisome than anticipated, we await tangible improvement before suggesting shares are a good value here," Feeney wrote in a research note.

Constellation reported net income of $72.1 million, or 33 cents per share, for its fiscal second quarter ended Aug. 31, up from $68.4 million, or 28 cents per share, a year earlier.

Excluding one-time items, the company earned 35 cents per share, topping analysts' average estimate of 32 cents, according to Reuters Estimates.

Net sales fell 37 percent to $892.6 million as the company changed the way it reports revenue for its Crown Imports and Matthew Clark wholesale joint ventures, effectively removing revenue from the beers it imports and distributes, such as China's Tsingtao and Mexico's Corona Extra.