The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Treehouse Foods beat expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue increased. Non-GAAP earnings per share expanded. GAAP earnings per share shrank significantly.
Margins dropped across the board.
Treehouse Foods chalked up revenue of $592.8 million. The 14 analysts polled by S&P Capital IQ anticipated net sales of $577.4 million on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $535.8 million.
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 $0.86. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.86 per share. Non-GAAP EPS of $0.86 for Q4 were 1.2% higher than the prior-year quarter's $0.85 per share. GAAP EPS of $0.68 for Q4 were 16% lower than the prior-year quarter's $0.81 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 20.1%, 180 basis points worse than the prior-year quarter. Operating margin was 8.2%, 260 basis points worse than the prior-year quarter. Net margin was 4.3%, 130 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $555.3 million. On the bottom line, the average EPS estimate is $0.70.
Next year's average estimate for revenue is $2.27 billion. The average EPS estimate is $3.09.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 95 members out of 109 rating the stock outperform, and 14 members rating it underperform. Among 36 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 31 give Treehouse Foods a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Treehouse Foods is outperform, with an average price target of $57.80.
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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.