Constellation Brands Inc. (STZ) swung to a fiscal second quarter profit that exceeded analyst expectations, aided by efforts to cut costs and reduce debt.

The stock jumped 7% in early trading, hitting $16.21. The wine and spirits maker reaffirmed its full-year earnings forecast, with Chief Executive Rob Sands saying that despite a challenging economic environment, "we are beginning to see some signs of stabilization."

The company said its efforts to consolidate its distribution system in the U.S. is nearly complete and it expects those efforts to boost growth going forward. Constellation Brands also expects to continue to reduce debt and improve cash flow. In recent years, the company's appetite for deals pushed up its debt levels, which became a concern for investors, although those worries have since eased.

Standard & Poor's Ratings Services last month cited Constellation's improved operating performance and debt reduction when it boosted the company's rating. Constellation Chief Financial Officer Bob Ryder said Thursday the company trimmed debt by more than $155 million during the quarter by more than $1 billion for far this fiscal year.

Constellation has cut jobs and is revamping its international operations amid weakness at its U.K. and Australian businesses.

For the period ended Aug. 31, the provider of Mondavi wines and Corona beers swung to profit of $99.7 million, or 45 cents a share, from a year-earlier loss of $22.7 million, or 11 cents a share. Excluding restructuring and other charges, earnings rose to 54 cents from 45 cents.

Net sales dropped 8.3% to $876.8 million. Sales excluding acquisition, divestiture and currency impacts rose 4%.

Analysts polled by Thomson Reuters expected earnings, excluding items, of 41 cents on revenue of $834 million.

Gross margin rose to 35.3% from 32% amid the cost cutting.

Branded wine sales, which represent the bulk of its earnings, rose 2% excluding currency changes. Spirits surged 49% excluding divestitures on strong sales of the Svedka vodka brand.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com;