Pinnacle Foods has upped its full-year earnings forecast on the back of its recently-announced acquisition of salad dressings business Wish-Bone, despite seeing its net losses wide in the first half.
The US food group today (14 August) recorded a net loss of US$7.04m. This compares to a net loss of $1.02m in the prior year period. The result was affected by charges related to the April close of its IPO and debt refinancing. EBIT dropped to $91.6m from $107.1m.
Nonetheless, the company upped its full-year guidance on the back of its $580m deal for Wish-Bone and a second dressings brand, Western, from Unilever, announced this week.
“We are excited to add Wish-Bone to our portfolio and expect it to be slightly accretive to EPS in 2013. Wish-Bone is a great fit with our successful strategy of reinvigorating iconic brands and enhances our ability to offer consumers meal solutions across our broad portfolio,” said CEO Bob Gamgort.
The company now expects EPS of $1.53 to $1.57, compared to previous guidance of $1.49 to $1.55.
Pinnacle provided half-year profits excluding charges and on a pro-forma basis, which assumed the IPO happened on the first day of fiscal 2012 and the debt refinancing on the first day of the 2013 financial year. On that basis, net earnings jumped 80%; EBIT increased 16.1%. Profits were up from Pinnacle’s Duncan Hines grocery and Birds Eye frozen divisions.
Nevertheless, sales declined by 1.9% to $1.18bn as Pinnacle quit low-margin, unbranded speciality businesseses and the unfavourable impact on its North America Retail business of early Easter timing in 2013.
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