Shares of B&G Foods soar on promising outlook

PORTLAND, Ore. - Shares of B&G Foods Inc. soared Friday after the food producer and distributor reported lackluster third-quarter results, but offered an outlook that investors found encouraging.

In afternoon trading, shares of B&G rose 71 cents, or 24.9 percent, to $3.56. The stock has ranged from $2.54 to $12.23 over the past year.

The company reported late Thursday its net income slipped to $2.9 million, or 8 cents per share for the quarter, from $4.8 million, or 13 cents per share, in the third quarter of last year.

Sales edged lower to $116.5 million from $117 million. Volume declines brought net sales down $5.2 million, but price increase offset that with a $4.7 million boost during the quarter.

Analysts polled by Thomson Reuters expected income of 12 cents per share on revenue of $119.8 million.

B&G said it struggled with increased costs for wheat, maple syrup, corn, packaging, transportation and sweeteners, which were partially offset by price increases.

The company also said it expects adjusted fourth-quarter earnings will be relatively flat at $24.3 million and full year earnings for 2008 will be in the range of $90 million to $91 million.

Additionally, B&G announced a program to repurchase up to $10 million in common stock and 8 percent senior notes.

RBC Capital Markets analyst Edward Aaron said B&G's results were disappointing, but said the company's outlook softened the blow.

He wrote in a research not that while B&G remains an "attractive investment for income-oriented investors", wary investors are staying away from highly levered small caps, even with excellent yields. He maintained a $4 price target and "Sector Perform" rating on the company.

B&G earlier this month that it will cut its work force by 7.5 percent to cope with rising costs.

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