Pinnacle Foods Q3 Results Top View, Sees 2013 EPS At High End Of Prior Range

(RTTNews) - Convenience foods company Pinnacle Foods, Inc. (PF) reported Wednesday a profit for the third quarter that soared four-fold from last year, reflecting lower charges, improved margins and revenue growth. The results also reflect a lower interest expense.

Stripping down the charges, adjusted earnings per share and quarterly net sales topped analysts' expectations. The company also said it now expects earnings for the full-year 2013 at the high end of its previous guidance range, citing the strong year-to-date performance.

"The third quarter results demonstrate the success of our strategy of Reinvigorating Iconic Brands through focused investment spending, strong productivity results and maintaining a lean and efficient organization structure. We achieved solid net sales growth in our North America retail business, and we expanded our margins and EPS meaningfully in the quarter," CEO Bob Gamgort said in a statement.

The maker of Birds Eye frozen foods, Duncan Hines baking mixes and frostings, and Vlasic shelf-stable pickles reported net earnings of $40.69 million or $0.35 per share for the third quarter, sharply higher than $9.88 million or $0.11 per share in the prior-year quarter.

Excluding items, adjusted net earnings for the quarter was $42.36 million or $0.36 per share, compared to $30.50 million or $0.26 per share in the year-ago quarter.

On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.35 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter edged up 0.8 percent to $572.46 million from $567.91 million in the same quarter last year, and topped four Wall Street analysts' consensus estimate of $563.16 million.

North America retail net sales increased 2.2 percent to $482 million from last year, as Birds Eye Frozen segment net sales edged up 0.8 percent to $258 million, and Duncan Hines Grocery segment net sales improved 4.0 percent to $224 million from a year ago. However, net sales for the specialty foods segment declined 6 percent to $90 million.

Gross margin for the quarter improved 220 basis points to 27.5 percent from last year, as favorable product mix and productivity more than offset the modest input cost inflation.

Interest expense also more than halved to $19.5 million from $44.4 million in the year-ago quarter.

Looking ahead to fiscal 2013, Pinnacle Foods now expects adjusted earnings at the high end of its previous guidance range of $1.53 to $1.57 per share. Street is currently looking for full-year 2013 earnings of $1.56 per share.

"We are confident that our programs for the balance of the year appropriately address continuing challenges in the industry," Gamgort added.

In Wednesday's regular trading session, PF is currently trading at $27.13, up $0.16 or 0.59% on a volume of 13,168 shares.