The 10-second takeaway
For the quarter ended Dec. 29 (Q2), Hillshire Brands missed slightly on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share dropped significantly.
Margins dropped across the board.
Hillshire Brands booked revenue of $1.06 billion. The seven analysts polled by S&P Capital IQ anticipated revenue of $1.08 billion on the same basis. GAAP reported sales were 49% lower than the prior-year quarter's $2.08 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 $0.62. The nine earnings estimates compiled by S&P Capital IQ anticipated $0.46 per share. GAAP EPS of $0.53 for Q2 were 86% lower than the prior-year quarter's $3.91 per share. (The prior-year quarter included $3.66 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 31.3%, 240 basis points worse than the prior-year quarter. Operating margin was 10.2%, 220 basis points worse than the prior-year quarter. Net margin was 6.1%, 1,640 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $966.7 million. On the bottom line, the average EPS estimate is $0.30.
Next year's average estimate for revenue is $4.09 billion. The average EPS estimate is $1.58.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 286 members out of 357 rating the stock outperform, and 71 members rating it underperform. Among 93 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 76 give Hillshire Brands a green thumbs-up, and 17 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 $28.63.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.