Investors Not Impressed with Ralcorp Earnings

Investors do not seem impressed after Ralcorp Holdings Inc. (NYSE: RAH) said this morning that acquisitions helped boost  its fiscal third-quarter profit. Shares are down slightly in early trading.

The St. Louis maker of cereal, snacks, sauces and bakery goods reported that its quarterly net earnings rose to $29.8 million from $28.3 million in the same period of last year. Adjusted EPS came to $0.60, which fell short of the consensus forecast. Third-quarter sales rose 11% year over year to $1.03 billion. That was in line with analysts’ expectations.

Acquisitions completed during fiscal 2012 include the North American private-brand refrigerated dough business of Sara Lee Corp., Pastificio Annoni SpA, Petri Baking Products Inc. and Gelit Srl. Acquisitions contributed approximately $0.03 to adjusted EPS for the third quarter.

The net sales increase was largely due to the acquisitions of refrigerated dough business and Petri. Base-business net sales increased 2% as a result of higher overall net pricing in response to significant growth in raw material (ingredients and packaging) and freight costs. This increase was offset partially by an overall 6% volume decline driven by weakness in the Snacks, Sauces & Spreads segment, as well as the voluntary resignation of a co-manufacturing contract in the Cereal Products segment.

Mostly, shares were down less than 1% in early trading. At the open, the share price was $64.24, in a 52-week trading range of $59.28 to $89.86. Thomson Reuters had a consensus analyst price target of $74.86 before this the report.