Bullish stock to watch: Post Holdings Inc (NYSE: POST)

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Post Holdings Inc (NYSE: POST) stock rose over 2% in the pre market session of November 22nd, 2019 (Source: Google finance) as the company posted better than expected results for the fourth quarter of FY 19. Net earnings fell 73.3% to $124.7 million. The company delivered the operating profit of $781.0 million, an increase of 36.2%, compared to the prior year operating profit of $573.5 million, including the segment profit of $60.8 million attributable to the historical Private Brands business.

POST in the fourth quarter of FY 19 has reported the adjusted earnings per share of $1.39, beating the analysts’ estimates for the adjusted earnings per share of $1.07, according to Zacks Investment Research. The company had reported 11.5 percent fall in the adjusted revenue to $1.44 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $1.43 billion.

Additionally, during the fourth quarter of 2019, Post  had repurchased 2.4 million shares for the total of $242.1 million at an average price of $99.75 per share. During FY19, Post had repurchased 3.3 million shares for $330.8 million at an average price of $98.76 per share. In Q4, 2019, Post had approved a new $400 million share repurchase authorization, with repurchases occurring over a two year period beginning on September 4, 2019. At the end of the fourth quarter of 2019, the company had $338.5 million remaining under its new share repurchase authorization.

On the other hand, during the quarter, the IPO of 39.4 million shares of BellRing Class A common stock was completed. After the completion of the IPO and certain transactions completed in connection with the IPO, BellRing became the holding company for BellRing Brands, LLC (which became the holding company for Post’s historical Active Nutrition business), and Post now holds approximately 71% of the economic ownership of BellRing Brands, LLC. For fiscal year 2020, the net sales is expected to range between $1.0-$1.05 billion, Adjusted EBITDA is expected to range between $192-$202 million and capital expenditures to be of approximately $4 million.

In addition, for fiscal year 2020 Adjusted EBITDA, including 100% contribution from BellRing and excluding any contribution from 8th Avenue and the acquisition of TreeHouse Foods’ private label RTE cereal business, to be in the range of $1.22-$1.27 billion, with modest favorability to the second half of fiscal 2020. Post management expect fiscal year 2020 capital expenditures to be in the range of $240-$260 million.

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