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B&G Foods Sees Earnings Growth Again in Fiscal 4Q15

B&G Foods Saw Positive Growth, So Why Did BGS Stock Fall?

B&G’s earnings missed estimates by 12%

On February 25, 2016, after the Markets closed, B&G Foods (BGS) reported its financial results for fiscal 4Q15 and fiscal 2015, which ended January 2, 2016. The company’s adjusted net earnings for 4Q15 were $25 million, or $0.43 per share. It showed a YoY (year-over-year) increase of 10%. Fiscal 4Q14 net earnings were $21.2 million, or $0.39 per share.

The company has seen positive earnings growth since fiscal 3Q14. It has been beating earnings estimates since 1Q15. However, this quarter, it missed the estimate by 12.2%. Fiscal 2015 adjusted net earnings were $86.8 million, or $1.53 per share, compared to $77.1 million, or $1.44 per share, in fiscal 2014.

What was excluded from adjusted earnings?

The fourth quarter and yearly adjusted earnings exclude the acquisition-related adjustment to deferred taxes charges and the after-tax effect of the amortization of acquisition-related inventory step-up. Also excluded from earnings are other acquisition-related expenses and distribution restructuring expenses. Analysts who follow the company are forecasting an earnings increase this year of 39.8% over last year. Analysts expect growth in earnings next year of 4.5% over this year’s forecast earnings. They also expect the company to grow earnings at an average annual rate of 12.9% over the next five years.

What about the company’s peers?

B&G Foods’ competitors in the processed and packaged food industry are Keurig Green Mountain (GMCR), McCormick & Company (MKC), and Flowers Foods (FLO). They recorded EPS (earnings per share) of $0.69, $1.16, and $0.15, respectively, in their last reported quarters. The iShares S&P Small-Cap 600 Growth ETF (IJT) and the SPDR S&P 600 Small Cap Growth ETF (SLYG) invest a total of 1.2% in BGS.

What to look for in this series

In this series, we’ll look at the following:

  • how B&G Foods performed in fiscal 4Q15

  • how revenue benefited from acquisitions

  • how the stock reacted to the 4Q15 earnings release

  • how BGS and its peers are trading compared to their moving averages

  • what Wall Street analyst recommendations are for the stock after the earnings release

  • how much BGS’s gross margins rose for the quarter

  • the operating margins and EBITDA (earnings before interest, tax, depreciation, and amortization) increase

  • the company’s guidance for fiscal 2016

  • the dividend increase

Continue to Next Part

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