WhiteWave Foods Q3 Results Top Estimates, Boosts 2014 EPS Outlook

(RTTNews) - WhiteWave Foods Co. (WWAV), spun off Dean Foods (DF) in 2012, reported Monday a profit for the third quarter that surged 68 percent from last year, reflecting continued strong margin expansion and a revenue increase amid strong volume growth in both the North America and Europe divisions.

Both adjusted earnings per share and quarterly net sales topped analysts' expectations. The company also provided earnings guidance for the fourth quarter, below Street view, and raised earnings forecast for the full-year 2014.

"We reported another quarter of strong financial results, with record net sales and strong operating performance leading to further earnings growth. Our organic net sales growth of 12 percent in the third quarter is the highest rate we achieved this year," Chairman and CEO Gregg Engles said in a statement.

The Denver, Colorado-based leading consumer packaged food and beverage company in North America and Europe reported net income of $40.86 million or $0.23 per share for the third quarter, higher than $24.29 million or $0.14 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $46.64 million or $0.26 per share, compared to $33.84 million or $0.19 per share in the year-ago quarter.

Meanwhile, adjusted net income for the latest quarter was $0.27 per share, excluding investments associated with China joint venture.

On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.26 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter increased 34 percent to $857.47 million from $638.52 million in the same quarter last year, and topped fourteen Wall Street analysts' consensus estimate of $843.25 million. Organic net sales grew 12 percent, excluding the Earthbound Farm acquisition.

The company attributed the strong double-digit sales growth to the contribution Earthbound Farm, which was acquired for $600 million in January. Earthbound Farms is the largest grower of organic produce in the U.S.

North America net sales for the quarter increased 36 percent to $728.28 million, and Europe net sales grew 24 percent to $129.19 million from the year-ago quarter. North America organic net sales improved 10 percent, excluding the Earthbound Farm acquisition.

"Impressive results by our market-leading brands in North America and Europe powered another strong quarter as consumers across continents are increasingly looking for great-tasting, healthy and responsibly produced foods and beverages," Engles stated.

Looking ahead to the fourth quarter, the company expects adjusted earnings in a range of $0.26 to $0.27 per share, excluding China Joint Venture, on projected net sales growth in the low-thirties on a percentage basis. Excluding Earthbound Farm, net sales on an organic basis is expected to increase about 8 percent.

Analysts expect the company to report earnings of $0.28 per share on net sales growth of 31.3 percent to $892.03 million for the quarter.

For full year 2014, the company raised adjusted earnings guidance to a range of $0.99 to $1.00 per share from the prior guidance in the range of $0.98 to $1.00 per share, excluding investments in its joint venture in China.

The company also now projects net sales growth in the low to mid-thirties on a percentage basis. Excluding Earthbound Farm, net sales on an organic basis is expected to increase around 11 percent.

Street is currently looking for full-year 2014 earnings of $0.99 per share on net sales growth of 34.0 percent to $3.42 billion.

"We enter the fourth quarter with strong growth momentum across all our businesses, positioning us to finish off 2014 with continued strong results, leading us to increase our full year EPS guidance," Engles added.

In Monday's regular trading session, WWAV is currently trading at $36.74, down $0.19 or 0.50% on a volume of 1.83 million shares.