Lamb Weston Shares Jump 11% After Beat and Higher Full-Year Guidance
Lamb Weston beat first-quarter profit forecasts and raised its full-year outlook, with North American volume growth leading the quarter, though a steep fall in International earnings and rising input costs temper the picture.
Shares in Lamb Weston (US: LW) jumped about 11% today after it beat first-quarter profit forecasts and raised its full-year guidance. Adjusted earnings per share were $0.75 against a consensus of $0.59, on sales of $1.67bn against about $1.65bn expected.
The stock traded at $49.44 at about 4:02pm UK time today, a delayed quote, up 10.93% on yesterday’s $44.57 close. It opened at $47.03 and has ranged from $46.78 to $49.65 today, after the results landed at 1pm UK time, before the US open.
North America drove the quarter. Volume rose 7%, the seventh straight quarter of growth, and segment adjusted EBITDA, which is earnings before interest, tax, depreciation and amortisation, rose 11% to $287m, including $5m of tariff refunds.
Sponsored content
Ready to put what you’ve learned into practice?
Try IG’s platform with £10,000 in virtual funds and practise trading
without putting your own money at risk.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
Sponsored content
Learn the markets with IG Academy
Build your knowledge with IG Academy educational content, then use a
demo account to practise what you’ve learned on the IG platform.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
Sponsored content
See how trading works before risking real money
IG’s demo gives you access to thousands of markets and £10,000 in
virtual funds, so you can explore the platform and test your ideas first.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
Sponsored content
Turn trading theory into practical experience
Learn with IG Academy, explore charts and market tools, and practise
strategies in a simulated trading environment before going live.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
Sponsored content
Ready to take your learning further?
IG combines market education, analysis and an established trading platform,
giving you the tools to keep learning as you develop your trading skills.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
International was the weak spot. Sales fell 8% to $529m and adjusted EBITDA dropped 54% to $27m, which the company said was in line with its expectations.
Group adjusted EBITDA was $286m, down 5% from $302m, and adjusted earnings per share were only 1% above the $0.74 of a year earlier, so the raised guidance matters more than the beat. Adjusted earnings per share are now expected at $3.05 to $3.35, from $2.95 to $3.25. Adjusted EBITDA is guided to $1.125bn to $1.215bn, from $1.10bn to $1.20bn, and net sales to rise by low single digits, against flat to up 1% before.
Lamb Weston closed at $41.18 on Thursday, down from $55.36 on the 25th of August, before bouncing to $44.57 yesterday. Source: daily closing prices
The shares had fallen about 20% in the four weeks to Thursday, so part of today’s rise may be a rebound from depressed levels. The company also beat in the previous quarter, reported on the 24th of July, with earnings per share of $0.87 against $0.62 expected.
Sponsored
The stock is dollar-priced, so UK traders reaching it through an international broker or CFD take dollar exposure. The weak International result, input-cost inflation and the rebound from a steep fall are reasons for caution about reading one session as a trend.
Chief executive Mike Smith pointed to rising costs:
We continue to experience unexpected inflationary pressure across key input costs and freight expense. Our teams are addressing cost inflation by working with suppliers and hedging where possible.
The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.
