NEW YORK (TheStreet) -- Hillshire Brands
(HSH) shares are up 3.2% to $36.44 following the release of the company's first quarter earnings results.
Net sales for the quarter rose 3.4% over the previous year to $955 million, beating analysts quarterly estimates of $939 million.
Net earnings for the meat producer were $42 million, or 35 cents per share, missing analysts estimates by 1 cent.
The meat producer was forced to raise price this quarter due to higher pork and beef costs, joining other food industry company's who raised prices.
TheStreet Ratings team rates HILLSHIRE BRANDS CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:"We rate HILLSHIRE BRANDS CO (HSH) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, increase in net income, revenue growth, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HILLSHIRE BRANDS CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HILLSHIRE BRANDS CO turned its bottom line around by earning $1.49 versus -$0.12 in the prior year. This year, the market expects an improvement in earnings ($1.71 versus $1.49).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 76.9% when compared to the same quarter one year prior, rising from $65.00 million to $115.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 2.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Food Products industry and the overall market, HILLSHIRE BRANDS CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- In its most recent trading session, HSH has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- You can view the full analysis from the report here: HSH Ratings Report