WhiteWave Foods’ Earnings Expected to Rise 26% in 4Q15



Positive earnings growth

WhiteWave Foods (WWAV) has been showing tremendous positive growth in earnings over the past few quarters. Earnings continue to rise every quarter. WWAV’s adjusted diluted EPS (earnings per share) for 3Q15 was $0.33. This excluded operating costs associated with the company’s China joint venture.

WWAV reported third quarter 2015 adjusted diluted earnings per share of $0.31 including the joint venture costs. However, currency translation had a negative impact of $0.02 on EPS. Earnings delivered YoY (year-over-year) growth of 22.2% in 3Q15.

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EPS estimates and guidance

Analysts estimate EPS of $0.34 for 4Q15, an improvement of 26% YoY if the company is in-line with estimates. For 2015, they expect EPS of $1.17, a rise of 17% YoY. The company has been surpassing estimates every quarter since fiscal 1Q14. Looking at the trend, we can expect an earnings beat this quarter too.

The analysts that follow WWAV expect it to grow its earnings at an average annual rate of 17.1% over the next five years. Analysts are forecasting earnings growth this year of 17.5% over last year. Analysts expect earnings growth next year of 16.7% over this year’s forecast earnings.

The company’s management in its 3Q15 press release announced that it had increased its 2015 adjusted diluted EPS guidance to be in the range of $1.22–$1.23 on a constant currency basis. This would exclude the anticipated $0.07 per share impact from operating investments in the China joint venture. Excluding this impact, they expect EPS to be in the range of $1.17–$1.18 on a US dollar–reported basis.

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The company’s expectation for 4Q15’s adjusted diluted EPS is $0.35–$0.36. This again excludes a ~$0.02 per share impact from the China joint venture. EPS of $0.34–$0.35 are expected on a US dollar–reported basis. This figure is anticipated based on current foreign exchange rates and excluded the joint venture impacts.

Peers’ earnings estimate

Peers of WhiteWave Foods in the food and packaging industry include Lancaster Colony (LANC), General Mills (GIS), and J.M. Smucker Company (SJM). EPS estimates for the upcoming fiscal 3Q16 are $0.62 for GIS and $1.62 for SJM.

The estimate for LANC for its upcoming fiscal 3Q16 is $0.83. To gain exposure to WWAV’s peers’ stocks, you can invest in ETFs such as the PowerShares Dynamic Food and Beverage ETF (PBJ). It invests a total 11.1% of its portfolio in these three stocks.


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