Hillshire Q4 Top Estimates - Update

(RTTNews) - Meat products maker Hillshire Brands Co (HSH), Tuesday reported a decline in fourth-quarter profit, hurt by weak margins that offset growth in sales at its retail and food-service segments. Nonetheless, both earnings and revenue for the quarter topped Wall Street estimates.

Hillshire CEO Sean Connolly said: "Despite acute cost inflation, we delivered better than expected performance through a disciplined approach to brand building, pricing and cost management."

Hillshire, which is being acquired by bigger rival Tyson Foods, posted quarterly net earnings from continuing operations of $27 million or $0.22 a share, compared with $35 million or $0.28 a share last year.

Excluding items, adjusted earnings were $0.33 a share, compared with $0.26 a share last year.

On average, 8 analysts polled by Thomson Reuters expected earnings of $0.26 a share for the quarter. Analysts' estimates typically exclude special items.

Hillshire, based in Chicago, Illinois, said sales for the quarter climbed 10.7 percent to $1.1 billion from $962 million in the prior year. Six analysts had a consensus revenue estimate of $994.1 million for the quarter.

Results reflect positive price and mix in the retail and food-service segments, partly offset by lower volumes arising from pricing actions.

Operating margin slid to 5.5 percent from 7 percent last year.

In July, Springdale, Arkansas-based Tyson Foods agreed to acquire Hillshire for $63 per share, or about $8.55 billion, including outstanding debt, eliminating a rival bid from chicken products maker Pilgrim's Pride (PPC).

On Tuesday, the companies received a request for additional information from the Antitrust Division of the Department of Justice in connection with the deal. The deal is expected to close by September 27.

In view of its pending acquisition, Hillshire said it is not providing targets for fiscal 2015.

Hillshire stock is trading at $62.79, up $0.12 or 0.20%, on a volume of 1.6 million shares on the NYSE.