Zacks Analyst Interview Highlights: Hershey Foods, Dean Foods and Pepsi Bottling Group

Business Wire,  August 7, 2007  

Tags: Dean Foods, Hershey Foods Corp., New York Stock Exchange

• E-mail
• Print
• Link

CHICAGO -- Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst Steven Ralston, who discusses Hershey Foods (NYSE: HSY), Dean Foods (NYSE: DF) and Pepsi Bottling Group (NYSE: PBG).

A synopsis of today's Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.

Is 2007 progressing as you had envisioned, or do you find yourself making adjustments to your estimates?

Earnings growth in the food, beverage, tobacco, household products and cosmetics industries are still expected to be up modestly in the mid- to high-single digit range. New product introductions are bolstering volume growth. Low-single digit sales growth is expected along with some price increases.

Though rising commodity costs are pressuring margins, productivity programs at many companies are offsetting some of the cost inflation. The exception is dairy costs. Due to high demand for corn from ethanol producers, corn prices have increased; therefore, dairy costs have increased significantly, negatively impacting the earnings of Hershey Foods (NYSE: HSY) and Dean Foods (NYSE: DF).

What company is at the top of your Buy list at this time?

Pepsi Bottling Group (NYSE: PBG) is my favorite Buy at this time. Despite a challenging cost environment, management continues to execute well. Volume only rose 1% during the latest quarter, but the company reported solid 5% net revenue per case. In addition, European volume growth was strong at 6%. Both new product introductions and innovative packaging helped sustain volume growth.

In addition, cost and productivity initiatives are more than offsetting cost pressures from higher raw material prices and higher SG&A expenses from acquisitions and increased marketplace investments. Earnings increased 14.8% year-over-year. Concurrent with the second quarter earnings report, management also raised full-year EPS guidance.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2679.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros by going to http://at.zacks.com/?id=2648.

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

(a)The Zacks Performance Rank performance is the total return of equal weighted simulated portfolios consisting of those stocks with the indicated Zacks Rank net of fees. Results reflect the reinvestment of dividends and other earnings. Simulated results do not represent actual trading and may not reflect the impact that economic and market factors might have had on decision-making if an adviser were actually managing a client's money.

(b)The S&P 500 Index ("S&P 500") is a well-known, unmanaged index of the prices of 500 large-company common stocks selected by Standard & Poor's. The S&P 500 includes the reinvestment of all dividends, no transaction costs, and represents the gross returns before management fees.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

COPYRIGHT 2007 Business Wire
COPYRIGHT 2008 Gale, Cengage Learning