Flowers Foods Quarterly Profit Up, Sees Higher Results In Full Year - Update

(RTTNews) - Packaged bakery products maker Flowers Foods, Inc. (FLO) Tuesday reported a sharp increase in second-quarter profit, as sales grew about 32 percent, driven by higher volumes as well as contributions from Lepage Bakeries and Sara Lee/California acquisitions. Margins improved due to the increase in volume and capacity utilization. The company also sees higher earnings per share and revenues for full year 2013.

President and CEO Allen Shiver stated, "The integration of our recent acquisitions - Lepage Bakeries in New England and Sara Lee in California - remains on pace. Both of these businesses have significant growth potential as Nature's Own, Tastykake, and other Flowers brands gain more acceptance in these markets."

In the second quarter, the company's net income climbed to $46.46 million or $0.22 per share from $28.38 million or $0.14 per share in the previous year. During the latest quarter, the firm incurred acquisition-related costs of $3.7 million, net of tax or $0.02 per share. Excluding costs, adjusted earnings for the recent quarter were $0.24 per share.

On average, nine analysts polled by Thomson Reuters expected earnings per share of $0.23 for the quarter. Analysts' estimates typically exclude one-time items.

Quarterly sales grew 31.8 percent to $898.15 million from $681.56 million, which also came above analysts estimate of $859.39 million.

The company attributed the growth in sales to 21.8 percent increase in volumes, while, acquisitions of Lepage Bakeries and Sara Lee/California contributed 10.9 percent to sales. Dollar sales and volume increased across all channels.

Gross margin was 47.5 percent, up from 46.3 percent a year ago.

For full-year 2013, the company now expects earnings per share to be in the range of $0.92 to $0.98, excluding acquisition-related costs. However, this include the impact of financing and carrying costs of the acquired assets.

The outlook represents an increase of 34.2 to 43 percent over the 2012 adjusted earnings per share of $0.69, the company said.

Sales for the year are anticipated to be $3.793 billion to $3.824 billion, an increase of 24.5 to 25.5 percent over 2012. The Lepage and Sara Lee/California acquisitions are likely to contribute about 7.0 percent of the sales increase.

Analysts expect the company to earn $0.97 per share, on revenues of $3.70 billion for the year.

FLO is currently trading at $23.41, down 0.47 percent.