Canada's Saputo Q2 revenue beats estimates on higher market prices

Saputo

Thu 22:09

Overview
Canada dairy processor's fiscal Q2 revenue rose 3.6%, beating analyst expectations
Adjusted EBITDA climbed 14% with margin expanding to 10.3%, led by high-protein dairy ingredients
Company announced sale of Dairy Division (UK) to sharpen focus and strengthen balance sheet

Outlook
Company expects continued strong demand for high-protein dairy ingredients
Saputo anticipates persistent inflationary pressures on input costs to remain a headwind
Company plans to focus on capital allocation, including investments and share repurchases

Result Drivers
HIGH-PROTEIN INGREDIENTS - Co said higher market prices and increased capacity for high-protein dairy ingredients were the primary drivers of earnings growth and margin expansion
FAVOURABLE PRODUCT MIX - Co attributed improved results to higher sales volumes and a shift toward value-added and high-protein products
OPERATIONAL EFFICIENCIES - Co said ongoing manufacturing, warehousing, and network optimization, especially in the U.S., contributed to productivity gains and cost efficiencies

Company press release: ID:nGNX5tt9N8

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Revenue
Beat
C$4.26 bln
C$4.17 bln (9 Analysts)
Q2 Net Earnings from Continuing and Discontinued Operations
 
C$259 mln
 
Q2 Adjusted EBITDA
 
C$438 mln
 

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 5 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the food processing peer group is "hold"
Wall Street's median 12-month price target for Saputo Inc. is C$47.00, about 13% above its November 4 closing price of C$41.58
The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 18 three months ago

Reuters Recommended Reads
Nov 4 - Canada's Maple Leaf Foods misses Q3 revenue estimates; backs FY rev view
Nov 4 - Canada's Linamar Q3 sales rise on industrial demand, market-share gains
Nov 4 - Canada's Nutrien Q3 profit misses estimates on higher costs, lower crop nutrient sales

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)