Boston, MA 05/15/2014 (wallstreetpr) – On Wednesday, Pinnacle Foods Inc (NYSE:PF), which is soon to be acquired by Hillshire Brands Co.(NYSE:HSH), reported its first quarter financial performance. The first quarter was marked by a profit growth of as much as 64% indicating improved gross margins, lower interest expense and sales surge.
First-Quarter Results
Excluding charges, the company posted adjusted earnings per share of $0.36 per share, which exceeded the analysts’ estimates of $0.35 per share. However, Pinnacle Foods Inc (NYSE:PF) reported revenues of $644 million, which increased 5.15 year-over-year, but missed to come in line with the market consensus of $649.3 million. The company noted that the impact of the shift in Easter holidays was to the tune of $0.02 per share in the quarter. The growth in sales is primarily a reflection of its $575 million Wish-Bone acquisition, which was able to partially offset the negative impact arising from the shift of Easter holidays and decline in the specialty foods division. The company maintained its guidance for the year 2014 at levels as earlier projected, that is adjusted earnings growth in the range of $1.70-$1.75 a share versus the estimates of $1.74 per share.
Hillshire Acquisition
Earlier on Monday, Hillshire Brands moved to acquire the company in exchange of a cash and stock deal worth $6.6 billion, which includes the outstanding debt. The deal is unanimously being cleared by the Board of Directors of both the companies and is slated to close by September this year. The acquisition is expected to generate immediate earnings for Hillshire. Moreover, analysts back the transaction as they see it as a strategic long-term play by Hillshire. Analysts at Morningstar state that the deal would help Hillshire to diversify its business and add scalability that could reduce the margin fluctuations.
It is to be noted that Hillshire and Pinnacle Foods Inc (NYSE:PF) deal comes just a week after Mondelez International Inc. and D.E. Master Blenders announced their plans to merge coffee business.
