The 10-second takeaway
For the quarter ended Sep. 29 (Q1), Hillshire Brands met expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted significantly and GAAP earnings per share increased.
Gross margins contracted, operating margins contracted, net margins grew.
Hillshire Brands logged revenue of $1.01 billion. The seven analysts polled by S&P Capital IQ wanted to see a top line of $1.00 billion on the same basis. GAAP reported sales were 48% lower than the prior-year quarter's $1.94 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.51. The eight earnings estimates compiled by S&P Capital IQ predicted $0.32 per share. GAAP EPS were $0.43 for Q1 compared to -$1.85 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 30.3%, 170 basis points worse than the prior-year quarter. Operating margin was 8.3%, 120 basis points worse than the prior-year quarter. Net margin was 5.2%, 1,640 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.08 billion. On the bottom line, the average EPS estimate is $0.47.
Next year's average estimate for revenue is $4.08 billion. The average EPS estimate is $1.50.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 280 members out of 351 rating the stock outperform, and 71 members rating it underperform. Among 83 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 63 give Hillshire Brands a green thumbs-up, and 20 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Hillshire Brands is hold, with an average price target of $28.13.
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