Lamb Weston Holdings (LW) - Get Report soared nearly 12% to $94.14 after strong sales and earnings growth helped the frozen potato supplier beat Wall Street's fiscal second-quarter earnings expectations.
The Eagle, Idaho-based company reported net income of $140.4 million, or 95 cents a share, up from $119.0 million, or 74 cents a share, a year ago. Adjusted earnings came to 95 cents, up from 80 cents, and beat the FactSet consensus of 84 cents.
Sales totaled $1.02 billion, up 12% from a year ago, and topped the FactSet consensus of $962.7 million. The increase was primarily driven by growth in the company’s global and foodservice segments.
“In the second quarter, we delivered strong sales, volume and earnings growth across each of our core business segments by continuing to execute well across the organization,” said Tom Werner, president and CEO. “We’re generating strong cash flow, and we’re investing that cash back into the business to support customer growth, improve manufacturing operations and systems, and bolster our presence in key markets such as Australia and South America. We’re also returning more cash to shareholders, including recently raising our quarterly dividend by 15%.”
For fiscal 2020, Lamb Weston raised its growth guidance to the high end of mid-single digit percentage range from the mid-single digit range, largely driven by volume as well as modestly higher price-mix.
Werner said that "while overall raw potato supply in and is tight due to relatively poor weather late in the growing season and during the harvest, we expect to have enough raw potatoes to support our volume growth targets for the year."