Treehouse Foods, Inc. (NYSE: THS), a food manufacturer primarily serving the retail grocery and foodservice channels, recently reported better-than-expected first quarter earnings of $0.34 per share versus $0.24 per share on a 39% sales increase. Shares climbed by $2.20 per share, or 10 percent, to $24.20 per share on news of the earnings report.
Excluding plant closure costs, the company posted earnings of $0.34 per share in the first quarter. Analysts and Wall Street expected a profit of $0.25 per share. The company’s revenues increased 39 percent to $360.6 million from $259 million in the first quarter of 2007. Treehouse Foods is anticipating profits between $0.29 per share and $0.32 per share for the second quarter, while analysts are predicting profits of $0.31 per share.
The company attributes higher revenue to several acquisitions in 2007, including its purchase of condiments maker E.D. Smith. Higher consumer prices also helped sales, which is expected to help the company keep margins intact. In addition, Treehouse Foods could also benefit from any shift in consumer behavior toward buying more private-label products, which are typically lower priced.
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