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
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