Pinnacle Foods Q2 Loss Widens, But Lifts Full-year Earnings Outlook

(RTTNews) - Pinnacle Foods Inc. (PF) on Wednesday reported a loss for the second quarter that widened from last year on one-time charges and lower sales. Excluding items, the company reported an adjusted profit for the quarter.

Looking ahead, the maker of branded convenience food products raised its fiscal 2013 earnings outlook to reflect its recently-announced acquisition of Wish-Bone salad dressings business.

Bob Gamgort, Chief Executive Officer of Pinnacle Foods said, "We held share across the composite of our categories; however, our net sales were impacted by overall category weakness, partially due to the earlier timing of Easter."

The maker of Birds Eye frozen foods, Duncan Hines baking mixes and frostings, and Vlasic shelf-stable pickles said its net loss for the second quarter widened to $31.84 million or $0.28 per share from $10.56 million or $0.13 per share in the year-ago period.

The latest quarter's results include charges relating to the April 3, 2013 close of the company's initial public offering, subsequent debt refinancing actions and other items affecting comparability. Combined, these charges impacted financial results by $62 million on an after-tax basis in the quarter.

Excluding these items, pro forma net earnings for the quarter were $33.69 million or $0.29 per share, compared to pro forma net earnings of $20.40 million or $0.17 per share in the same period last year. On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter declined 3 percent to $569.04 million from $588.60 million in the previous-year quarter. Analysts had a consensus revenue estimate of $576.64 million for the quarter.

The decline in sales were driven by a 12 percent decline in sales at the Specialty Foods segment, including the planned exit of low-margin unbranded businesses and the unfavorable impact on the company's North America Retail business of the earlier timing of Easter in 2013.

Looking ahead to fiscal 2013, Pinnacle Foods expects the addition of Wish-Bone, which it anticipates to close late in the third quarter or early in the fourth quarter of 2013, to be accretive to earnings per share by $0.01 to $0.02.

Accordingly, the company raised its full-year earnings per share guidance to a range of $1.53 to $1.57 from the prior range of $1.49 to $1.55. Analysts expect the company to earn $1.53 per share for the year.

In early August, Pinnacle Foods said it has agreed to acquire the Wish-Bone salad dressings business from Anglo-Dutch consumer goods giant Unilever Plc. (UL, ULVR.L, UN) for $580 million. Wish-Bone's portfolio being acquired include a broad range of liquid and dry-mix salad dressing flavors under the Wish-Bone and Western brand names.

In Wednesday's regular trading session, PF is trading at $25.88, down $0.34 or 1.30 percent on a volume of 110,662 shares.