Hot dog! TreeHouse Foods
For the quarter, the company's earnings rose to $9.4 million, or $0.30 a share, compared to last year's comparable $6.6 million, or $0.21 per share. If you back out a penny gain from facilities sales, the remaining $0.29 was $0.01 higher than the analysts who follow the company had been expecting. And while that penny isn't the biggest positive surprise in the history of earnings releases, investors responded to the obviously tasty direction of TreeHouse's results by raising the company's share price 16% on Friday. There was some slippage on Monday, but its shares remain more than 9% above their pre-release price.
TreeHouse's solid quarter was similar to the results provided by its larger rivalKraft Foods
In addition to its line of pickles and relishes, TreeHouse's list of marketed products includes peppers, soups, infant foods, non-dairy creamers, sauces, and egg substitutes. Its revenue, which grew 10% to $256 million in the quarter, is expected to move above $1 billion this year, thanks in part to the recent acquisitions of DeGraffenreid, LLC, a Missouri-based processor and distributor of pickles and related products, and San Antonio Farms, a producer of Mexican sauces.
So, the market obviously has found a lot of reasons to relish this company, and it's difficult to fault that assessment. Management has been successful on the cost and pricing fronts, and the new acquisitions are already bearing fruit. Further, with Campbell recently getting Wall Street's attention by announcing a movement into Russia and China, TreeHouse's current concentration in the Western Hemisphere seems to provide it with a significant opportunity for further expansion.
All in all, Fools, it appears wise to keep a growing and well-managed TreeHouse Foods prominently displayed on your investment shelves.
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Kraft, Heinz, and Campbell Soup are all Motley Fool Income Investor recommendations.